State Bank & Trust of Kenmare v. Brekke

1999 ND 212, 602 N.W.2d 681, 1999 N.D. LEXIS 230, 1999 WL 1077166
CourtNorth Dakota Supreme Court
DecidedDecember 1, 1999
Docket990064
StatusPublished
Cited by17 cases

This text of 1999 ND 212 (State Bank & Trust of Kenmare v. Brekke) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Bank & Trust of Kenmare v. Brekke, 1999 ND 212, 602 N.W.2d 681, 1999 N.D. LEXIS 230, 1999 WL 1077166 (N.D. 1999).

Opinion

NEUMANN, Justice.

[¶ 1] Duane U. Brekke, d/b/a Brekke Limited Partnership (“Partnership”), appealed from a district court judgment awarding damages to State Bank & Trust of Kenmare (“the Bank”), relating to a Partnership building which encroached upon an adjacent lot owned by the Bank. The trial court concluded the Partnership, by adverse possession, owns the entire building and the land upon which it sits, and that conclusion has not been challenged by the Bank. We, therefore, hold Brekke is not hable for damages to the Bank on equitable principles of unjust enrichment based upon the encroachment. We further hold, however, the deed by which Brekke conveyed the adjacent lot to the Bank contained a personal warranty by Brekke to defend the title against claims “by, through, or under” him, which was breached, as a matter of law, by the Partnership’s claim against the Bank’s title, arising by adverse possession under color of title from Brekke. We also hold there is no statutory authority for the court’s award of attorney fees or basis for assessing interest on the damages prior to October 13, 1989. We, therefore, modify the damage award to include interest after October 13, 1989 and to eliminate the award of attorney fees. As so modified, we affirm the judgment.

[¶ 2] Brekke acquired Lot 1, St. Croix Addition in Minot (“St. Croix lot”) by contract for deed in July 1984. The Partnership was formed in August 1984. In September 1984 Brekke, by assignment of the contract for deed, transferred the St. Croix lot to the Partnership. The Partnership made final payment on the St. Croix lot in April 1986 and received a warranty deed for the property in September 1986. Brekke had acquired an adjacent parcel of land, platted as the Northern States Power Site, (“NSP lot”) by warranty deed in April 1981. Brekke received loans from the Bank secured by *683 numerous mortgages on the NSP lot, executed in April 1981, June 1981, November 1986, and February 1988.

[¶ 3] In late 1984, Brekke visually discovered that a warehouse building located on the St. Croix lot encroached upon the NSP lot. By an unrecorded document designated “memorandum of purchase” dated August 30, 1986, Brekke purported to sell that portion of the warehouse which encroached upon the NSP lot and the land under it to the Partnership for $2,600. On October 13, 1989, Brekke, and his wife Jeanne, deeded the NSP lot to the Bank in satisfaction of the mortgages Brekke had given the Bank for the loans. The Bank, in anticipation of selling the NSP lot, had it surveyed in late 1994 and discovered the warehouse building on the St. Croix lot encroached upon the NSP lot. On June 5, 1995, the Bank filed an action against Brekke, d/b/a Brekke Limited Partnership, seeking to quiet title in the Bank to the NSP lot and seeking damages against Brekke for breach of warranties under the October 13,1989 deed.

[¶ 4] After a hearing, the trial court entered written findings and an order for judgment. The court concluded the Partnership had acquired, through adverse possession, that part of the St. Croix warehouse building which encroaches upon the NSP lot and the land upon which it sits. The court quieted title to the building and the land in the Partnership. The court’s findings and act of quieting title in the Partnership have not been challenged by the Bank.

[¶ 5] The court also found, however, that Brekke became personally aware in 1984 that the warehouse building on the St. Croix lot encroached upon the NSP lot but never advised the bank of the encroachment or of his action in 1986 in conveying the encroaching portion of the building to the Partnership. The court further determined the Bank was entitled to damages on equitable principles to avoid unjust enrichment to Brekke, personally. The court awarded damages to the Bank of $2,500 plus interest, reflecting the purchase price the Partnership paid Brekke for the encroaching building, the real estate taxes paid by the Bank on that portion of the NSP lot upon which the encroaching building is located, the reasonable cost to survey and plot the lot, interest, and reasonable costs and attorney fees of the litigation. These damages were awarded against Brekke, personally, not the Partnership, and Brekke filed this appeal from the judgment.

[¶ 6] On appeal, Brekke contends there is no legal basis for the court to award damages in favor of the Bank against him, in view of the court’s conclusion the encroaching building and land upon which it is located is legally and rightfully owned by the Partnership through adverse possession.

[¶ 7] To acquire ownership of property by adverse possession the property of another must be held by open and hostile possession for a specific time. Benson v. Taralseth, 382 N.W.2d 649, 652 (N.D.1986). Under N.D.C.C. § 28-01-04 the required period is twenty years. Under N.D.C.C. § 47-06-03 one can acquire title by adverse possession after ten years if the possession is under color of title coupled with the payment of taxes. A deed constitutes color of title only as to the land described in it, and land occupied under the mistaken belief it is encompassed in the deed does not confer adverse possession under color of title. 16 Powell on Real Property, § 1013[2][g] (1999); see also III American Law of Property, § 15.11 (1952). Adverse possession may be asserted where there has occurred an encroachment over a boundary line, whether or not the encroachment is the result of an intentional action. 16 Powell on Real Property, § 1012[3] (1999).

[¶ 8] The trial court found the Partnership acquired title under N.D.C.C. § 47-06-03, by adversely possessing the encroached property of the NSP lot under color of title for ten years. Neither party *684 has challenged that determination by the trial court. Consequently, the Partnership owns the entire building and land upon which it is situated by its open and notorious possession of it for the requisite statutory period. Brekke’s knowledge and conduct regarding the encroachment of the building is not relevant to the Partnership’s ownership by adverse possession and provides no basis upon equity principles to award damages to the Bank for its loss of the property to the Partnership. The Bank has not cited any authority for awarding damages to a landowner against whom property has been taken by adverse possession. The effect of acquiring title by adverse possession is to bar the remedy of ejectment and to take away all other remedy, right, and title of the former owner. Ill American Law of Property, § 15.14 (1952). We hold the trial court’s award of damages on equitable principles is not in accord with the law. The Bank pled, however,- another ground for seeking damages against Brekke, personally, which, we conclude, provides a valid basis for the court’s damage award. When the trial court errs, we will not set aside a correct result merely because the trial court assigned an incorrect reason if the result is the same under the correct law and reasoning. Almont Lumber & Equip., Co. v. Dirk, 1998 ND 187, ¶ 10, 585 N.W.2d 798.

[¶ 9] In its complaint, the Bank also contended it is entitled to damages against Brekke, personally, for the breach of warranties contained in the October 13, 1989 deed, which provides, in relevant part:

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Cite This Page — Counsel Stack

Bluebook (online)
1999 ND 212, 602 N.W.2d 681, 1999 N.D. LEXIS 230, 1999 WL 1077166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-bank-trust-of-kenmare-v-brekke-nd-1999.