Title: Bonnell v. Cotner

State: indiana

Issuer: Indiana Supreme Court

Document:

ATTORNEY 
FOR 
APPELLANT 
ATTORNEY 
FOR 
APPELLEES 
Travis 
J. Bonnell 
Jim 
J. Brugh 
Indianapolis, Indiana 
Logansport, Indiana 
3511 the 
Santana 
émpreme 
Qtuurt 
No. 66503-1509—PL-530 
TOM 
BONNELL, 
Appellant 
(Defendant 
below), 
RUBY 
A. 
COTNER, 
DOUGLAS 
WAYNE 
COTNER, 
ARTHUR 
J. JOHNSON, 
JIMMY 
J. 
JOHNSON, 
and 
JERRY 
L. JOHNSON, 
Appellees (Plaintzfﬂv below). 
Appeal 
from 
the Pulaski County 
Circuit Court, No. 66C01-1208—PL-11 
The 
Honorable 
Patrick B. Blankenship, Special Judge 
On 
Petition to Transfer from 
the Indiana 
Court 
of 
Appeals, 
No. 66A03-1410-PL-372 
February 
16, 2016 
Massa, 
Justice. 
Tom 
Bonnell purchased a 35-foot-wide strip of 
land from the Pulaski County Board of 
Commissioners, 
and 
Ruby 
and 
Douglas 
Cotner 
brought 
this action 
to quiet 
title, claiming 
that 
they 
had 
previously 
acquired 
ownership 
of 
a 
section of 
that land 
via 
adverse 
possession. The 
trial court 
disagreed, ﬁnding 
that 
the 
prior 
sale of 
the Strip by 
tax deed 
extinguished any 
interest the Cotners
Feb 16 2016, 9:27 am
may 
have 
had. Nevertheless, 
the 
trial court 
awarded 
the 
Cotners 
a 
prescriptive easement 
on 
certain 
outbuildings erected 
on 
the Strip, and 
both parties appealed. We 
afﬁrm 
the denial of 
the Cotners’ 
adverse 
possession 
claim, and 
reverse 
the grant of 
a 
prescriptive easement, ﬁnding 
that the sale of 
the Strip by 
tax deed 
extinguished any 
and 
all interest the Cotners 
previously 
possessed. 
Facts 
and 
Procedural 
History 
In 1948, Leo 
and 
Ruth Cottingham subdivided 
their seven~acre parcel in Pulaski County, 
Indiana into eleven residential lots. Lot 1 consisted of 
a two—acre block on 
the south end of 
the 
parcel, while 
the remaining 
ten lots were 
all equal half-acre rectangles, deﬁned 
as “One 
hundred 
(100) feet by Two hundred Fourteen and One-half (2141/2) feet.” 
Plaintiff 
s EX. G at 20; 
Defendant’s Ex. 2. The original survey accompanying the subdivision also accounts for State 
Highway 
119, and 
it marks 
the western 
boundary 
of 
these lots as being 
at the center of 
the State’s 
right of 
way. There is also an ancient farm fence 214 
feet from 
the eastern edge of 
the State’s 
right of 
way. There 
is thus a 35-foot gap 
in between 
the edge 
of 
the parcels and 
the fence on 
the 
eastern edge (“the Strip”), which was 
not a part of 
the ofﬁcial parcel division; nevertheless, the 
owners 
of 
Lots 
2 through 11 treated 
their respective 
portions of 
the Strip as part of 
their 
property, 
and 
they 
believed 
the ancient farm 
fence marked 
the property 
line. Ruby 
Cotner 
purchased 
Lot 8 
in 1997.1 The 
previous owners of 
Lot 8 constructed a barn in 1968, and the Cotners expanded 
upon 
it with 
a 
lean—to 
in 2010; 
a 
portion 
of 
these 
buildings encroaches 
some 
distance onto 
the 
Strip. 
1 Shirley Johnson purchased Lot 9 in 1990, from whom 
the Johnson 
Plaintiffs (her sons) obtained title in 
2009. Although 
the Johnsons were 
initially plaintiffs in this case, they quitclaimed their interest in Lot 9 
to the Cotners during 
the pendency of 
this action; therefore, the Cotners are the only interested party on 
appeal.
The 
Strip was 
originally included 
by 
title with 
the larger farm 
ﬁeld 
to the east; however, 
it 
was 
divided off 
Via quitclaim deed 
in 1985. The State subsequently sold the Strip twice Via tax 
sale; the ﬁrst in 1993 to Jeff Kopkey, and the second in 2011 to the Pulaski County Board of 
Commissioners, who 
then sold the Strip 
to Bonnell 
in 2012. When 
he 
bought 
it, Bonnell 
believed 
the Strip was 
located 
on 
the eastern 
side of 
the ancient 
fence. Upon 
a 
subsequent 
survey, 
however, 
he discovered the Strip was located effectively in the backyards of 
the Cottingham Subdivision 
owners. Bonnell then proposed 
a 
sale of 
each section of 
the Strip to the property owner 
who 
had 
been occupying 
the land, at $890 apiece. All the owners eventually reached an agreement with 
Bonnell except 
the Johnsons 
and 
the Cotners, who 
asserted ownership of 
their section of 
the Strip 
by adverse possession, and ﬁled this suit to quiet title. 
Bonnell defended on the grounds the 
Cotners had 
not demonstrated 
they 
paid 
taxes on 
the disputed 
portion of 
the Strip and 
thus could 
not 
perfect their adverse possession claim under 
Indiana law. And 
in any 
event, the Indiana Tax 
Deed 
Statutes, Ind. Code 
chs. 6-1.1-24 and 
—25 (2014), mandate 
that the sale of 
any 
property by 
tax deed 
severs all prior claims of 
ownership, including 
ownership by 
adverse 
possession. 
The trial court agreed with Bonnell, ﬁnding since title to the Strip ran separately at all 
times, the Cotners could not reasonably believe they were paying taxes on their portion of 
the 
Strip, and 
thus had 
not 
perfected 
their 
claim 
of 
adverse 
possession. The 
trial court 
went 
on 
to ﬁnd, 
as a matter of ﬁrst impression, that even if the Cotners’ adverse possession claim had been 
perfected, 
the subsequent 
tax sales of 
the Strip divested 
the 
Cotners 
of 
their 
interest. However, 
the 
trial court also determined 
sua 
sponte that the Cotners should 
receive a 
prescriptive easement 
for 
use 
of 
their outbuildings encroaching onto 
the Strip. 
Both parties appealed, and a unanimous panel of our Court of Appeals reversed and 
remanded. Bonnell v. Cotner, 35 N.E.3d 275, 284 (Ind. Ct. App. 2015). The panel found the 
Cotners showed 
they paid taxes on 
the outbuildings that encroached upon 
the Strip, which was 
sufﬁcient 
to 
establish good 
faith, and 
the 
subsequent 
tax 
sales 
could 
not 
divest 
an 
adverse 
possessor 
of 
their 
interest, because 
otherwise 
“vested 
adverse 
holders may 
become 
divested 
of 
their 
property
for failing to pay taxes despite reasonably believing in good faith that they are paying the 
appropriate taxes due.” & 
at 283 (emphasis in original). 
We 
granted 
transfer, thus 
vacating 
the 
Court 
of 
Appeals 
opinion 
below. Bonnell 
V. Cotner, 
37 
N.E.3d 
493 
(Ind. 2015) 
(table); Ind. Appellate Rule 
58(A). We 
now 
afﬁrm 
the 
trial court 
with 
respect to the denial of 
title to the Cotners 
by 
adverse 
possession, but 
reverse as to granting them 
a 
prescriptive easement. 
Standard 
of 
Review 
The 
parties’ claims 
were 
tried 
without 
a 
jury; therefore, we 
“shall 
not 
set aside 
the ﬁndings 
or 
judgment 
unless clearly erroneous.” Ind. Trial Rule 52(A). “Findings of 
fact are only 
clearly 
erroneous if there is no factual support for them in the record whatsoever, either directly or by 
inference.” Johnson v. Wysocki, 990 N.E.2d 456, 460 (Ind. 2013). “A 
judgment is clearly 
erroneous if 
it applies the wrong 
legal standard 
to properly found 
facts.” Woodmffv. 
Ind. Family 
& 
Soc, Servs. Admin, 
964 
N.E.2d 
784, 790 
(Ind. 2012) 
(quoting 
Nichols 
v. Minnick, 885 
N.E.2d 
1, 3 (Ind. 2008)). 
The 
Cotners 
Established Their 
Claim 
of 
Adverse 
Possession of 
the 
Disputed 
Portion of 
the Strip. 
As 
we 
explained in great detail in Fraley 
v. Minger, there are four 
traditional elements to 
adverse possession at common 
law: control, intent, notice, and duration. 829 N.E.2d 476, 486 
(Ind. 2005). Bonnell does 
not 
dispute 
that 
the Cotners have 
established all of 
these elements with 
respect to the disputed portion of 
the Strip. Rather, Bonnell 
relies on 
our 
holding 
in m 
that, 
pursuant 
to Indiana Code 
section 32-21-7-1 (2008), an adverse possessor 
is required to pay 
taxes 
on 
the property 
claimed 
in order to perfect his or her interest, although substantial compliance is
sufﬁcient, so long 
as “the adverse 
claimant 
has 
a 
reasonable 
and 
good 
faith belief 
that 
the claimant 
is paying 
the 
taxes during 
the 
period 
of 
adverse 
possession.” Fraley, 829 
N.E.2d 
at 493.2 Bonnell 
claims the Cotners did not satisfy this requirement because they paid taxes on the encroaching 
outbuildings only, and 
not 
on 
the entire disputed portion of 
the Strip. 
We 
ﬁnd the Cotners have satisﬁed the adverse possession tax statute. 
In Fraley we 
expressly upheld our prior interpretation of 
this statutory adverse possession requirement from 
Echterling V. Kalvaitis, including the following hypothetical where 
substantial compliance with 
the adverse 
possession 
tax statute would 
exist: 
An 
example might be where one has record title to Lot No. l and 
has 
erected 
a 
building 
on 
that 
lot, which, 
twenty 
years 
later, is found 
by 
some 
surveyor 
to be one foot over 
on 
an adjoining lot, No. 2— 
the fact that the owner 
of 
Lot 
No. l was 
assessed 
for improvements 
(the building) and real estate (Lot No. 1) would be sufﬁcient to 
comply 
with 
the statute as to payment 
of 
taxes. 
Fraley, 829 N.E.2d 
at 490 
(quoting Echterling v. Kalvaitis, 235 Ind. 141, 147, 126 N.E.2d 573, 
575—76 (1955)). That precise scenario has occurred here: the Cotners’ predecessors-in-interest 
were 
assessed 
tax 
on 
the 
barn 
beginning 
in 1968, 
and 
at least a 
portion of 
that 
building encroaches 
upon 
the disputed portion of 
the Strip. That 
is sufﬁcient to establish the Cotners perfected their 
adverse possessory 
interest in the disputed area of 
the Strip as of 
1978. E 
Celebration Worship 
Ctr. Inc. v. Tucker, 35 N.E.3d 
251, 255 (Ind. 2015) (ﬁnding 
adverse possessor 
had 
substantially 
complied 
with 
tax statute “because 
they 
believed 
the disputed 
real estate to be 
part of 
the side yard 
of 
their 
lot 4ifor 
which 
they 
actually paid 
taxes.” (emphasis 
in original». 
2 Our 
General Assembly 
subsequently 
incorporated 
the holding of 
Fraley 
into Indiana 
Code 
section 32-21- 
7-1. E 
2006 
Ind. Acts 
3606 
(clarifying 
that 
the adverse 
possessor 
need 
only 
pay 
that tax 
“that the adverse 
possessor or 
claimant reasonably 
believes in good 
faith to be 
due”).
The 
Subsequent Tax 
Sales 
of 
the Strip Defeat 
the Cotners’ Claim 
of 
Ownership 
by 
Adverse 
Possession. 
Perfecting an adverse possessory interest, however, does not automatically entitle the 
Cotners 
to 
judgment 
in 
their 
favor. “[T]he 
doctrine of 
adverse 
possession 
entitles a 
person 
without 
title to obtain ownership to a parcel of 
land upon 
clear and convincing proof 
of 
control, intent, 
notice, and 
duration . 
. 
. .” My, 
829 
N.E.2d 
at 486 
(emphasis added). Acquiring 
ownership by 
adverse possession does not render 
operative all the rights and 
responsibilities of 
the record 
title 
holder; indeed, as demonstrated 
by 
the facts of 
this case, the adverse 
possessor 
would 
ﬁrst 
have 
to 
succeed in an action to quiet title in order to become the legally acknowledged owner of 
the 
property. E 
App. 
at 22—26; Ind. Code 
§ 32-30-2-20 (2014) (listing an adverse 
possessor 
as one 
type of 
plaintiff 
entitled to bring 
a quiet 
title action); Ind. Code 
§ 32-30—3-17 
(stating that the ﬁnal 
judgment 
in a 
quiet 
title action shall be 
entered 
by 
the 
county 
recorder 
in the 
“Quiet 
Title Record”). 
Moreover, although the Cotners’ predecessors-in-interest had a good faith belief 
that they were 
paying 
taxes on 
the disputed 
portion of 
the Strip, it is undisputed 
that they 
were 
not in 
fact 
paying 
those taxes. Accordingly, since the record title holder also failed to pay 
the requisite property 
taxes, the entire Strip was subject to tax sale by 
Pulaski County. & 
Ind. Code 
§ 6-1.1-24-1(a), 
(C) 
“A 
purchaser 
at a 
tax sale receives a 
tax certiﬁcate evidencing a lien against the property 
for the entire amount paid. The lien is superior to all other liens which exist at the time the 
certiﬁcate is issued.” Calhoun 
v. Jennings, 512 N.E.2d 178, 181 (Ind. 1987) (citing Ind. Code 
§6-1.1-24-9) (emphasis omitted). Any 
person may “redeem” the property within a statutory
period 
of 
up 
to one 
year 
after 
the 
date 
of 
sale.3 Ind. Code 
§ 6—1.1—25-1, —4(a). Once 
the 
redemption 
period 
expires, the 
tax 
certiﬁcate holder 
may 
petition the court 
for 
a 
tax deed 
to the 
property. Ind. 
Code 
§ 6—1.1-25-4.6(a). Our 
General Assembly 
has also twice stated that the tax deed “vests in 
the grantee an estate in fee simple absolute, free and 
clear of 
all liens and 
encumbrances created 
or 
suffered 
before or 
after the tax sale . 
. 
. .” Ind. Code 
§ 6-1.1-25-4(f), -4.6(g). There 
are a 
ﬁnite 
number 
of 
ways 
to defeat a 
tax deed 
by 
appeal; claim of 
title by 
adverse possession 
is not among 
them.4 
3 The 
redemption amount 
is determined 
based 
on, among 
other 
things, the date of 
redemption, the amount 
of 
outstanding taxes and 
penalties, the initial minimum 
bid 
of 
the sale, and 
the 
ultimate purchase 
price. E 
Ind. Code 
§ 6-1.1-25-2. 
4 & 
Ind, Code 
§ 6-1.1-25-16 
(“A 
person 
may, 
upon 
appeal, 
defeat 
the 
title conveyed 
by 
a 
tax 
deed 
executed 
under 
this chapter only 
if: 
(1) the tract or real property described in the deed was 
not subject to the 
taxes for which 
it was 
sold; 
(2) the delinquent taxes or special assessments for which 
the tract or 
real 
property was 
sold were 
paid 
before 
the sale; 
(3) the tract or real property was not assessed for the taxes and special 
assessments for which 
it was 
sold; 
(4) the tract or real property was redeemed before the expiration of 
the 
period 
of 
redemption 
(as speciﬁed 
in section 4 of 
this chapter); 
(5) the proper county 
ofﬁcers issued 
a certiﬁcate, within 
the time limited 
by 
law 
for paying 
taxes 
or for redeeming 
the tract or 
real property, which 
states either that no 
taxes were 
due 
at the time 
the sale was made 
or that 
the tract or 
real property 
was 
not 
subject to taxation; 
(6) the description of 
the tract or 
real property was 
so imperfect as to fail 
to describe 
it with 
reasonable certainty; or
Because of 
the relative strength of 
a tax deed, there are also several layers of 
statutory 
notice of 
the tax sale proceedings (and each such 
notice contains no 
less than fourteen mandatory 
components). Ind. Code 
§ 6-1.1-24-2; Ind. Code 
§ 6-1.1-25-4.5. The 
county 
auditor is required 
to post a copy of 
the ﬁrst notice in the county 
courthouse at least 21 days prior to the initial tax 
sale, publish 
the 
notice at least once 
a week 
for three consecutive weeks, 
Ind. Code 
§ 6-1.1-24-3, 
and 
further send a copy 
to “the owner 
of 
record.” Ind. Code 
§ 6—1.1—24—4(a) (emphasis added). 
Second, 
prior 
to the issuance 
of 
a 
tax deed, the 
purchaser 
must 
provide 
actual notice 
“to the owner 
of 
record 
at the 
time 
of 
the sale and 
any 
person 
with 
a 
substantial property 
interest ofpublic 
record 
in the 
tract or 
real property.” Ind. Code 
§ 6-1.1-25-4.5(a) (emphasis 
added). 
Here, although the Cotners’ predecessors-in-interest acquired ownership of 
the disputed 
portion of 
the Strip in 1978, they did not seek to quiet title and formalize that ownership. Thus, 
by 
statute, the Cotners 
were 
not 
entitled 
to any 
more 
than 
publication notice of 
the two 
tax sales in 
1993 and 
2011. And 
the very issuance of 
those tax deeds 
is prima 
facie evidence of 
the validity 
of 
the notice given 
in those tax sales, evidence 
that has 
not 
been 
rebutted by 
the Cotners. E 
Ind. 
Code 
§ 6-1.1-25-4.6(g) (“The 
deed 
is prima 
facie evidence 
of: (l) the regularity of 
the sale of 
the 
real property described 
in the deed; (2) the regularity of 
all proper 
proceedings; and 
(3) valid 
title 
in fee simple 
in the grantee 
of 
the 
deed”). There 
is also no 
evidence 
in the 
record 
that 
the Cotners 
or anyone else contested the validity of 
those tax sales, as permitted by Indiana Code section 
6-1.1-25-16. 
Moreover, the statutory text is uncompromising: 
the Pulaski County Board of 
Commissioners obtained “fee simple absolute” in the Strip in 2011, free and clear of any 
encumbrances. Ind. Code 
§ 6—1.1-25-4.6(g); w 
Ind. Code § 6-1.1—25-14 (“An unrecorded 
instrument does not affect the plaintiff’s title as established by 
the court’s [tax deed] decree”). 
(7) the notices required 
by 
1C 6-1.1-24-2, IC 6-1.1-24-4, and 
sections 4.5 
and 
4.6 of 
this chapter 
were 
not 
in substantial compliance 
with 
the manner 
prescribed in those sections”)
Accordingly, under 
the 
plain 
text of 
the Tax 
Deed 
Statutes, in 1993 and 
again in 2011, 
the 
Cotners 
were 
divested of 
their ownership interest based on adverse possession of 
the disputed section of 
the Strip. 
The 
Trial Court’s 
Award 
to the 
Cotners 
of a 
Prescriptive Easement 
in the Barn 
was 
Clearly 
Erroneous. 
We 
now 
turn 
to the 
trial court’s sua 
sponte award 
of 
a 
prescriptive easement 
to the Cotners 
for their continued use of 
the outbuildings, based on 
the court’s conclusion that the cost of 
their 
removal would 
“far exceed the value of 
the Defendant’s entire parcel, not 
just the portion upon 
which 
the building encroaches.” App. 
at 20. 
We 
begin by 
noting that the trial court was 
within its authority to consider awarding a 
prescriptive easement 
sua 
sponte. The 
Cotners 
pleaded 
with 
particularity 
in their complaint 
all of 
the elements of 
adverse possession, and “[t]he my 
formulation for adverse possession also 
applies to prescriptive easements, save for those differences required by 
the differences between 
fee interests and easements.” TLlcer, 35 N.E.3d 
at 257 (internal quotations omitted). The 
only 
relevant difference here is the requisite statutory period of 
adverse use—20 years—before the 
easement vested. 
Ind. Code § 32-23-1-1. 
The Cotners also speciﬁcally pleaded that the 
outbuilding was erected in 1968, and that they and their predecessors-in-interest had exercised 
exclusive control over 
the entire disputed portion of 
the Strip since that time. Moreover, in their 
prayer for relief, the Cotners included the familiar catch-all of 
“all other relief 
appropriate under 
the circumstances.” App. 
at 26. Therefore, there was 
sufﬁcient evidence 
before the 
trial court to 
determine the Cotners’ predecessors-in—interest had perfected a prescriptive easement in the 
outbuilding 
as of 
1988. 
Unfortunately, this attempt 
by 
the trial court to craft an equitable remedy 
was 
unavailable 
as a matter of 
law, again by 
operation of 
the Tax 
Deed 
Statutes. Indiana Code 
section 6-1.1-25-
4(f)(l) states unequivocally 
that for a 
prior easement 
over 
property 
to survive 
its sale by 
tax deed, 
the easement must be “shown by 
public records.”5 M 
Ind. Code 
§ 6-1.1-25-4(g) (“A tax 
deed executed under this chapter for real property sold in a tax sale: 
(1) does not operate to 
extinguish an 
easement 
recorded 
before the 
date of 
the tax 
sale 
in the office of 
the recorder 
of 
the 
county 
in which 
the real property 
is located 
. 
. 
. .” (emphasis added)). Thus, as with 
the Cotners’ 
claim 
of 
adverse 
possession, they 
cannot 
claim 
a 
prescriptive easement 
in the outbuilding because 
that easement 
was 
never 
recorded, and 
was 
therefore extinguished 
with 
the first tax sale in 1993.6 
Conclusion 
After 
more 
than 
three years of 
litigation and 
two 
vigorous appeals, Mr. 
Bonnell 
now 
owns 
a 
35—foot—by—100—foot 
section of 
land 
in the 
Cotners’ backyard, 
predominately 
covered 
with 
a 
pole 
barn, which 
Bonnell 
values 
at approximately 
$890. We 
affirm the 
denial of 
the Cotners’ claim of 
adverse possession in the disputed portion of 
the Strip, and reverse the grant of 
a prescriptive 
easement 
in the Cotners’ encroaching outbuildings. 
Rush, 
C.J., and 
Dickson, Rucker, 
JJ., concur. 
David, 
J 
., did not 
participate. 
5 We 
note that a counterpart of 
this provision appears in Indiana Code 
section 6-1.1-25-4.6(g), and 
it does 
not specify that prior easements must 
be recorded in order 
to survive a tax sale of 
the property; however, 
given that the scope of 
the two provisions is virtually identical, we 
are bound to read the two sections 
consistently. E 
Klotz 
v. Hog, 
900 
N.E.2d 
l, 5 (Ind. 2009) 
(“Statutes relating to the same 
general subject 
matter are in part materia on the same subject and should be construed together so as to produce a 
harmonious 
statutory scheme.” 
(internal quotations and 
alterations omitted». 
6 Since 
the second 
tax deed 
was 
issued 
in 2011, the Cotners did 
not 
acquire a second 
prescriptive easement 
in the outbuildings prior 
to 
the second 
tax sale, as the requisite 20 
years of 
use 
had 
not 
accrued.
10