United Bank v. Ashland Development Corp.

792 P.2d 775, 164 Ariz. 312, 55 Ariz. Adv. Rep. 73, 1990 Ariz. App. LEXIS 54
CourtCourt of Appeals of Arizona
DecidedFebruary 27, 1990
DocketNo. 2 CA-CV 89-0173
StatusPublished
Cited by3 cases

This text of 792 P.2d 775 (United Bank v. Ashland Development Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Bank v. Ashland Development Corp., 792 P.2d 775, 164 Ariz. 312, 55 Ariz. Adv. Rep. 73, 1990 Ariz. App. LEXIS 54 (Ark. Ct. App. 1990).

Opinion

OPINION

FERNANDEZ, Chief Judge.

All parties appeal from the trial court’s ruling that reformation is unavailable although a mutual mistake occurred and from its refusal to quiet title to real property. We agree the court erred and conclude that reformation should be granted.

Sometime prior to November 1979, William Small purchased three lots in El En-canto subdivision in Tucson from a couple named Mullin. The Mullins lived in a home that had been built on Lot 91, the largest of the three lots. The other two lots constituted part of the grounds for the home. Apparently because the home was built nearly to the edge of Lot 91, Mullin reconfigured the legal description to add to Lot 91 a 40-foot strip to the south and to remove it from the two adjoining lots, Lots 92 and 94. Small purchased the three lots from the Mullins, intending to remodel their home. He later changed his mind, demolished the house, and began building a new one. After construction began, Small once again changed his mind.

In November 1979, Small deeded the three lots to the Ashland Development Company, a corporation of which he is chairman of the board. The deed utilized the reconfigured legal descriptions created by Mullin. Ashland then began construction of three houses on the three lots, .employing the same architect whom Small had retained to build his house. The architect testified that he obtained a copy of the El Encanto subdivision plat map from a blueprint company and designed three houses with similar construction and features, utilizing the original property lines from the plat map.

In late December 1980 or early January 1981, appellees Thomas and Marcia Green saw the house being constructed on Lot 91 and began negotiations to purchase it. At the time they first saw the property, the exterior walls and roofs were completed on all three houses, the pools for Lots 91 and 92 were in place although Lot 91’s was not finished, and the brick and wood patio walls for all three were built. Small testified that the houses on Lots 92 and 94 were substantially finished- at the time. The testimony was that the architect designed the homes so that a patio wall provided privacy to each home. Between the patio walls is a 15 to 20-foot wide strip that is landscaped and has drip irrigation and lighting systems.

The Greens entered into a contract with Ashland to purchase the home on Lot 91 in March 1981. The contract was prepared by Ashland’s attorney who testified that he obtained the legal description from a title company. The description used the reconfigured description for Lot 91. The Greens’ deed was recorded the day after the purchase agreement was signed. It also shows the reconfigured legal description.

In May 1983, Ashland conveyed Lots 92 and 94 in trust to Title Insurance Company of Minnesota. The legal description for the two lots also follows Mullin’s reconfigured descriptions. Minnesota Title conveyed Lot 92 to appellant Dennis Rosen in May 1984. United Bank purchased Lot 94 at a trustee’s sale in January 1985 and conveyed it to Joseph Canchóla, subject to the outcome of this litigation, in June 1987. All the deeds utilize the reconfigured legal descriptions.

In July 1986, while Canchóla was negotiating to purchase Lot 94, he had the property surveyed in order to purchase a title insurance policy. The surveyor discovered that the legal descriptions in the deeds do not match the improvements on the properties. Included in the disputed 40-foot strip that is shown in the deed to be part of Lot 91 is half of Rosen’s living room, 30 feet of his backyard and 15 feet of his swimming [314]*314pool. The strip also includes one of Can-chola’s bedrooms and a substantial portion of his patio. The surveyor testified that the homes and improvements on the properties follow the original subdivision plat lines.

After the error was discovered, United Bank and Rosen submitted quit claim deeds to the Greens, seeking to correct the problem. After the Greens refused to execute them, appellants filed suit in January 1987 for reformation of the deeds and to quiet title to the disputed area. The Greens responded with a counterclaim to quiet title in them and a cross-claim against Ashland for rescission or for damages for fraud. The case was tried to the court in October 1988, and the Greens then withdrew their fraud claim. Although the court stated that “this case cries for relief to plaintiffs,” it ruled that the relief of reformation was inappropriate because there had been no showing as to the exact boundary agreed upon by the parties. After motions for reconsideration and for new trial were filed, the court made findings of fact and conclusions of law. One of its conclusions was that there was a mutual mistake in the deed from Ashland to the Greens but that reformation is not available. At the same time, the court determined that no evidence had been offered to support the Greens’ counterclaim to quiet, title to the property in them. As a result, the court awarded judgment to the Greens on the complaint and to United Bank and Rosen on the counterclaim. The disputed property thus remains with record title in the Greens and possession in Rosen and the Canchólas. All parties have appealed.

AVAILABILITY OF REFORMATION

The trial court found that the Greens did not know where the boundary line contained in the purchase contract and deed extended and that neither knew the specific location of their south boundary. As a result, it concluded that United Bank and Rosen were actually seeking to rewrite the terms of the parties’ contract through the remedy of reformation. In an earlier minute entry, the court cited the case of McNeil v. Attaway, 87 Ariz. 103, 348 P.2d 301 (1959) for the proposition that reformation is not available when the parties have never entered into an express agreement that can be reformed. In that case, the disputed property lay in an open field with no physical features on it that could have been agreed upon to establish the disputed boundary line.

As the trial court correctly noted, the cases cited by appellants involved situations in which a distinguishing feature existed that the parties had agreed constituted the boundary line with the result that the deeds were reformed to be consistent with the agreements. Berger v. Bhend, 79 Ariz. 173, 285 P.2d 751 (1955) (fence next to irrigation ditch); Underdown v. Reche, 122 Ariz. 439, 595 P.2d 671 (App.1979) (deed included house and rectory that parties agreed were not intended to be included); Chantler v. Wood, 6 Ariz.App. 134, 430 P.2d 713 (1967) (north edge of building); Longshaw v. Corbitt, 4 Ariz.App. 408, 420 P.2d 980 (1966) (oleander hedge).

The trial court apparently focused on the Greens' testimony that they did not walk a particular line that the parties expressly agreed was the boundary line before they purchased the property. In doing so, the court ignored other evidence as to the realities of the situation.

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Bluebook (online)
792 P.2d 775, 164 Ariz. 312, 55 Ariz. Adv. Rep. 73, 1990 Ariz. App. LEXIS 54, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-bank-v-ashland-development-corp-arizctapp-1990.