Haik v. Sandy City

2011 UT 26, 254 P.3d 171, 2011 WL 1758773
CourtUtah Supreme Court
DecidedMay 10, 2011
Docket20090451
StatusPublished
Cited by11 cases

This text of 2011 UT 26 (Haik v. Sandy City) 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
Haik v. Sandy City, 2011 UT 26, 254 P.3d 171, 2011 WL 1758773 (Utah 2011).

Opinion

Justice NEHRING,

opinion of the Court:

INTRODUCTION

T1 This case illustrates the importance of promptly recording a deed to a property right. Sandy City and the Plaintiffs ("Haik Parties") each hold deeds to the same water right. Sandy City recorded an "Agreement of Sale" for the water right in 1977, but did not record the deed until 2004. The Haik Parties purchased the same water right in 2008 and recorded their deed that year. We are asked to determine whether the district court erred when it quieted title in favor of the Haik Parties after concluding that the Haik Parties had first recorded their deed to the water right in good faith. The district court reasoned that the Agreement of Sale did not put the Haik Parties on notice of Sandy City's interest in the water right because it was an executory contract, i.e., there was no way to determine whether the con *174 tract was performed and whether the deed to the water right was delivered to Sandy City.

12 We conclude that the Agreement of Sale put the Haik Parties on record notice that Sandy City had an equitable interest in the water right. Whether record notice of an equitable interest in property defeats another's claim of having subsequently purchased the same property in good faith is a question of first impression. Although ree-ord notice of an equitable interest in a water right can, in some cireumstances, subvert a claim of having subsequently purchased the same water right in good faith, those cireum-stances are not present in this case. Accordingly, we hold that the Haik Parties first recorded their deed to the disputed water right in good faith and affirm the decision of the district court.

BACKGROUND

T3 Sandy City and the Haik Parties hold deeds to the same water right. Sandy City's chain of title is relatively straightforward. In 1974, Harold Bentley conveyed certain property, to which the disputed water right is appurtenant, to Saunders-Sweeney, Inc. About two years later, both Mr. Bentley and Saunders-Sweeney, as grantors, each signed quitclaim deeds that named Sandy City as grantee of the water right. Shortly thereafter, Mr. Bentley, Saunders-Sweeney, and the mayor of Sandy City Corporation signed an "Agreement of Sale" for the water right. The Agreement of Sale was recorded on January 14, 1977, in the Salt Lake County Recorder's Office. Sandy City thereafter received a quitclaim deed conveying the water right, but that deed was not recorded. It was simply kept in a separate file in the Sandy City Recorder's Office.

[4 The Haik Parties' chain of title is a bit more circuitous. In 1978, Saunders-Sweeney designated the property to which the water right is appurtenant as Lot 31 of the Little Cottonwood Subdivision. That same year, Saunders-Sweeney conveyed Lot 31 to Judith Saunders. The deed was recorded. Lot 31 was subsequently conveyed, through intermediate owners, to Lynn Biddulph in 1983. The water right was not reserved in any of these conveyances.

T5 In 1999, Saunders-Sweeney separately conveyed "all of its right, title and interest" in the water right to Ms. Biddulph by quitclaim deed, which was recorded. Shortly thereafter, Ms. Biddulph filed an application with the Utah State Engineer for a permanent change of water, which was approved. In response to the change application, Sandy City wrote a letter to the State Engineer expressing concern "if any activity to expand or further change the water right were to take place," but Sandy City did not claim ownership of the water right or otherwise contest Ms. Biddulph's ownership of the water right. Ms. Biddulph then expended money and effort to maintain the water right and related facilities.

16 In 2003, Ms. Biddulph conveyed the water right by quitclaim deed to LWC, L.L.C. Shortly thereafter, LWC conveyed the water right by quitclaim deed to Kevin Tolton (one of the Haik Parties). In October 2003, Kevin Tolton then conveyed the water right by quitclaim deed to the Haik Parties as tenants in common. The Haik Parties recorded the deed on December 10, 2003.

T7 Before the water right was conveyed to the Haik Parties, Mark Haik, a professional title examiner, searched the Salt Lake County Recorder's records concerning the water right. Mr. Haik did not locate the 1977 Agreement of Sale because his search started with records beginning in 1988 or 1984. Had Mr. Haik searched back to 1977, he likely would have found the Agreement of Sale.

8 In 2004, the Haik Parties filed an application with the Utah Division of Water Rights to change the diversion point of the water right. In an effort to oppose the application, Sandy City investigated the water right and located the Agreement of Sale from 1977. Sandy City then asked the Sandy City Recorder to find the referenced water right deed. The city recorder quickly located the original deed in the Sandy City Recorder's Office. At Sandy City's request, the city recorder recorded the deed in April 2004. But when Sandy City sought to update title with the Division of Water Rights, its request was rejected.

T9 The Haik Parties filed an action to quiet title to the water right. Both parties *175 moved for summary judgment. The district court granted the Haik Parties' motion for summary judgment and denied Sandy City's cross-motion for summary judgment. The district court found that the Haik Parties (1) recorded their deed before Sandy City and (2) purchased the water right in good faith because they did not have notice of Sandy City's unrecorded deed to the water right. The court reasoned that even though the Agreement of Sale referenced the disputed water right, the Agreement of Sale did not put the Haik Parties on record notice of Sandy City's interest in the water right because it was merely an executory contract with "no way to determine whether performance under the agreement actually occurred." Sandy City now appeals. We have jurisdiction under Utah Code section 78A-8~102(8)(j) (Supp. 2010).

STANDARD OF REVIEW

110 Summary judgment is appropriate only when there "is no genuine issue as to any material fact" and "the moving party is entitled to a judgment as a matter of law." 1 Because summary judgment involves questions of law, we grant no deference to the district court's ruling and review it for correctness. 2 We may affirm a district court's entry of summary judgment " 'f it is sustainable on any legal ground or theory apparent on the record." 3

ANALYSIS

11 The issue in this case is whether the Agreement of Sale put the Haik Parties on record notice of Sandy City's unrecorded interest in the disputed water right. The Haik Parties contend that the Agreement of Sale did not impart record notice because it is merely an executory contract, i.e., it is impossible to know from the text of the Agreement of Sale whether it was executed and whether the deed was actually delivered. Sandy City contends that the Agreement of Sale imparted record notice because it unambiguously describes a conveyance of the water right to Sandy City. Alternatively, Sandy City contends that even if the Agreement of Sale is an executory contract, it nevertheless put the Haik Parties on record notice that Sandy City possessed an equitable interest in the water right.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Harman v. 105 Partners
2024 UT App 109 (Court of Appeals of Utah, 2024)
Sean Rene Michael Burdette
S.D. Mississippi, 2023
Larson v. Stauffer
2022 UT App 108 (Court of Appeals of Utah, 2022)
Wells Fargo Bank v. Noerring
2018 UT App 232 (Court of Appeals of Utah, 2018)
Haik v. Salt Lake County Board of Health
604 F. App'x 659 (Tenth Circuit, 2015)
Pioneer Builders Co. of Nevada v. K D A Corp.
2012 UT 74 (Utah Supreme Court, 2012)
Liston v. Liston
2011 UT App 433 (Court of Appeals of Utah, 2011)
Federal Deposit Insurance Corp.v. Taylor
2011 UT App 416 (Court of Appeals of Utah, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
2011 UT 26, 254 P.3d 171, 2011 WL 1758773, Counsel Stack Legal Research, https://law.counselstack.com/opinion/haik-v-sandy-city-utah-2011.