Title: Baldwin v. Dube

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Baldwin v. Dube1988 WY 35751 P.2d 388Case Number: 87-150Decided: 03/11/1988Supreme Court of Wyoming
DICK DONALD BALDWIN; 
KEITH DANIEL BALDWIN; DONNA A. KNUDSON F/K/A DONNA A. GOODRICH; VICTOR GONI AND 
ELIZABETH GONI, APPELLANTS (DEFENDANTS), PETER ZAHARA, SR., AND AMY L. ZAHARA, 
(DEFENDANTS),

v.

RONALD R. DUBE AND CAROL 
A. DUBE, APPELLEES (DEFENDANTS AND THIRD-PARTY PLAINTIFFS), v. GARY R. MARSHALL 
AND ROMAINE L. MARSHALL, THIRD-PARTY DEFENDANTS, v. GORDON BYBEE AND IVA LEE 
BYBEE, (PLAINTIFFS).

Appeal from the District 
Court, JohnsonCounty, James N. Wolfe, 
J.

Randall T. Cox, 
Omohundro & Palmerlee, Buffalo, for appellants.

Timothy J. 
Kirven, Kirven & Kirven, Buffalo, for appellees.

Before THOMAS, CARDINE, URBIGKIT and MACY, JJ., 
and GUTHRIE, District Judge.

THOMAS, 
Justice.

[¶1.]     The main question to be 
addressed in this case is whether the district court made a correct 
determination that the record disclosed no genuine issue of material fact when 
it entered summary judgment in favor of the appellees on appellants' several 
claims for breach of warranty based upon warranty deeds to lots in a rural 
subdivision. Because of the possibility that the same questions may re-occur in 
this case, we also address incidental issues relating to the invocation of parol 
evidence and the obligation to make findings of fact and conclusions of law in 
entering a summary judgment pursuant to Rule 56, W.R.C.P. We are convinced that 
the record discloses genuine issues of material fact which made the disposition 
of these claims by summary judgment inappropriate. We reverse the judgment 
entered by the district court and remand the case for 
trial.

[¶2.]     The appellees, Ronald 
and Carol Dube (Dubes), acquired five acres of land from Gary and Romaine 
Marshall (Marshalls), in March of 1979 or 1980 (the discrepancy with respect to 
the year is a matter of record). The Marshalls conveyed the land to the Dubes by 
warranty deed, and, at the time of that conveyance, there existed a fence line 
running north and south which encroached fifty-four feet from west to east upon 
the boundary line of the five acres. At the time that the property was acquired, 
Ronald Dube knew that the fence line encroached upon the legal boundary line, 
and he also was aware of a claim to the fifty-four-foot strip based upon adverse 
possession by Gordon and Iva Bybee (Bybees), who owned the adjoining land to the 
west. The Dubes re-subdivided their five acres into four lots of 1 1/4 acres 
each, and they filed a plat of the subdivision with the county. The recorded 
plat shows the west boundary of the lots as the survey line, which is fifty-four 
feet west of the Bybees' fence.

[¶3.]     The Dubes then sold 
three of the lots to the several appellants, conveying by a warranty deed in 
each instance. Donna Knudson (Knudson) purchased Lot Two on September 1, 1981. 
Keith and Dick Baldwin (Baldwins) purchased Lot 
One on April 23, 1984. Dube Associates, a partnership of Ronald Dube and another 
person, is the grantor on that deed. Lot Three was conveyed to Victor and 
Elizabeth Goni (Gonis) on August 8, 1984. The Dubes retained ownership of Lot 
Four in the subdivision. After these several conveyances, the Bybees, claiming 
title by adverse possession, initiated an action to quiet the title to the 
fifty-four-foot strip. Knudson, the Baldwins, the Gonis, the Dubes and Peter and 
Amy Zahara were named as defendants in the action. Relying upon the warranties 
in their deed, the Baldwins cross-claimed 
against Ronald Dube, individually, and Dube Associates for damages or, 
alternatively, for rescission. Knudson and the Gonis filed similar cross-claims 
against the Dubes. The Dubes, by third-party complaint, sought recovery against 
their grantors, the Marshalls, seeking damages and indemnification with respect 
to the claims against them. The Bybees moved for summary judgment, which was 
granted by the district court, and a decree quieting title in them was 
entered.

[¶4.]     Then, the Marshalls, 
the third-party defendants, filed a motion for summary judgment against the 
Dubes; motions for summary judgment were filed by all of the appellants against 
the Dubes; and the Dubes filed motions for summary judgment against the 
Marshalls and all of the appellants. Following a hearing, the district court, in 
response to the several motions for summary judgment, entered judgment for the 
Dubes against the Baldwins, Knudson and the Gonis on their cross-claims and 
against the Dubes on their third-party complaint against the Marshalls. The Baldwins, 
Knudson and the Gonis filed a motion for amendment of judgment, requesting that 
the district court make findings of fact and conclusions of law and also seeking 
a new trial. This appeal was perfected after that motion was 
denied.

[¶5.]     Our review of a summary 
judgment is not limited by our usual rules, and we examine the case in the same 
manner as the district court, treating the motion as though originally before us 
and using the identical material and information which was presented to the 
district court. The party who moved for, and was granted, summary judgment is 
assigned the burden of establishing that no genuine issue of material fact 
exists and that he is entitled to judgment as a matter of law. A fact is 
material if it would have the effect of establishing or refuting one of the 
essential elements of a cause of action or a defense asserted by the parties. 
When the moving party introduces affidavits, or other discovery materials, which 
demonstrate the facts upon which he relies and establishes that no genuine issue 
of material fact exists, it then becomes the obligation of the opposing party to 
produce similar materials which controvert the prima facie facts in the moving 
party's materials. We are obliged to examine the factual materials from the 
vantage point which is most favorable to the party opposing the motion, giving 
to that party all favorable inferences which may reasonably be drawn from them. 
In this instance, the theories and the factual materials claimed to justify the 
summary judgment differ from party to party. Consequently, we must consider 
separately the summary judgment entered against each of the appellants, even 
though some of the grounds asserted for reversal of the summary judgment are the 
same as to all appellants.

[¶6.]     We already have noted 
that the conveyances to the Baldwins, Knudson and the Gonis were by warranty 
deeds1 which described in each instance 
the property conveyed by specific reference to the official plats filed with 
JohnsonCounty, which were prepared 
by Ronald Dube. The filed plats show the individual lots extending to the survey 
line which was east of the Bybees' fence. Each lot contained approximately 1.25 
acres. The Baldwins, Knudson and the Gonis all were aware of the discrepancy 
between the surveyed boundary and the Bybees' fence line. Under the law, 
however, knowledge of a potential defect in the Dubes' title, by itself, would 
not warrant summary judgment in favor of the Dubes.

[¶7.]     In Hoke v. Welsh, 162 
Neb. 831, 77 N.W.2d 659, 662 (1956), the court 
quoted with approval from Texas Company v. Snow, 172 Ark. 1128, 291 S.W. 826 
(1927), and said:

"* * * Knowledge or 
notice, however full, of an incumbrance or of a paramount title does not impair 
the right of recovery upon covenants of warranty, as they are taken for 
protection and indemnity against known and unknown incumbrances or defects of 
title."

The rule, stated 
in a recognized textbook, is:

"The grantee may have a 
right of recovery under a covenant of warranty even though he knew of the defect 
in title, or of the absence of title, at the time of the deed's execution." 7 G. 
Thompson, Commentaries on the Modern Law of Real Property § 3190 at 338 (1962 
Repl.).

An encyclopedic 
statement of the same rule is:

"As a general rule, the 
fact that the grantee or covenantee, or the grantor or covenantor, or both, 
knew, at the time of the conveyance, that the grantor's title was defective or 
that the grantor had no title in a part or in the whole of the land does not 
affect the right of recovery for a breach of covenant." 21 C.J.S. Covenants § 
538 at 908 (1940).

[¶8.]     In this instance, 
Ronald Dube excepted from each warranty deed "easements, reservations, 
covenants, and restrictions, if any, of record." Jones v. Grow Investment and 
Mortgage Company, 11 Utah 2d 326, 358 P.2d 909 (1961), illustrates 
the application of the general rule and addresses the matter of exceptions in a 
warranty deed. The warranty deed, in that case, provided that the property 
granted was "subject to deed restrictions and easements of record." The grantee 
inspected the property and discovered an irrigation ditch; and he was informed 
that the ditch was an easement by prescription, not of record. The Supreme Court 
of Utah affirmed a judgment for the grantee for breach of warranty and 
said:

"* * * However, with the 
possible exception of public easements that are apparent and in their nature 
permanent and irremediable, mere knowledge of the encumbrance is not sufficient 
to exclude it from the operation of the covenant. * * *

* * * * * 
*

"* * * The defendant saw 
fit to except from this covenant `deed restrictions and easements of record.' 
Nothing is manifested in the deed that any other encumbrances were to be 
excluded. It would have been a simple matter for the defendant, as grantor, to 
exclude from the covenant the existing ditch. * * * The very purpose of the 
covenant is to protect a grantee against defects and to hold that one can be 
protected only against unknown defects would be to rob the covenant of most of 
its value." Jones v. Grow Investment and Mortgage Company, supra, 358 P.2d  at 
911.

[¶9.]     Since the knowledge of 
the potential defect does not serve to sustain the summary judgment in this 
instance, we must consider the nature of any further knowledge possessed by the 
several grantees and their respective conduct in the case. The record is not 
clear concerning the extent of the knowledge of the Baldwins, Knudson or the 
Gonis so far as the strength or nature of the Bybees' claim to the disputed 
tract is concerned. Victor Goni, by deposition, stated that Ronald Dube told him 
that the disputed strip was part of his lot. Knudson, by deposition, testified 
that at the time she bought her lot, she thought the Bybees were disputing only 
the accuracy of the survey. She stated further that she had relied on the 
official plat in connection with her lot purchase. Dick Baldwin, in his 
deposition, said that he was aware of a problem with the fence line but that he 
had relied on the official plat. Ronald Dube denied these statements and 
asserted that each of the appellants had been informed directly by him, or 
indirectly by realtors, that the property purchased extended only to the fence 
line. The facts as to knowledge were in dispute.

[¶10.]  Even so, the Dubes contend that the trial 
court properly concluded that Knudson had waived her rights under the warranty 
deed. The waiver claim is premised upon language in the purchase offer, signed 
by Knudson:

"Buyer acknowledges she 
has inspected the property and she is making this offer based on her inspection 
and examination, independent of statements by Sellers, Broker, or Agents of 
Broker."

In addition to 
this language, the Dubes point to statements in Knudson's deposition supporting 
waiver. This court has said that "[w]aiver, as distinguished from estoppel, is 
the intentional relinquishment of a known right and must be manifested in some 
unequivocal manner * * *." Ranger Insurance Company v. Cates, Wyo., 501 P.2d 1255, 1259 (1972). See also 
Murphy v. Stevens, Wyo., 645 P.2d 82 (1982); 
Ramirez v. Metropolitan Life Insurance Company, Wyo., 580 P.2d 1136 (1978). Furthermore, the 
question of waiver normally is one for the jury. See 28 Am.Jur.2d Estoppel and 
Waiver § 174 (1966), and the cases cited therein. The language in the purchase 
offer cannot be construed as an unequivocal waiver of the warranties in 
Knudson's deed. What she said in her deposition was that she thought she was 
purchasing an acre and a quarter in accordance with the plat and that she did 
not understand initially that the lot, as platted, extended beyond the Bybees' 
fence. This information lends itself to an inference that she was ignorant with 
respect to the infringement upon her rights under the warranty deed. Both 
statements are refuted by Ronald Dube. The conclusion must be that there did 
exist a genuine issue of fact with respect to the question of waiver, which 
prevented resolution of that defense by summary judgment.

[¶11.]  With respect to the summary judgment 
against the Gonis, the Dubes assert that they were estopped from asserting their 
claims under their warranty deed. The estoppel is claimed to rest upon the 
Gonis' knowledge of the discrepancy in the boundary line. We earlier have 
recalled that, from the factual materials in the record, the extent of the 
Baldwins', Knudson's and the Gonis' knowledge of the Bybees' claim is disputed. 
Furthermore, simple awareness of the discrepancy between a fence line and a 
legal boundary does not constitute knowledge of a valid adverse claim to the 
disputed tract. In this regard, Victor Goni testified that Ronald Dube told him 
that the fifty-four-foot strip was part of the lot that Goni was 
purchasing.

[¶12.]  To support the theory of estoppel, the 
Dubes rely upon a Colorado case which deviates from the general rule, discussed 
earlier, that even though a grantee, at the time of the conveyance, knows of a 
defect in the grantor's title, his knowledge does not foreclose recovery for 
breach of the warranty in the deed. In Reinhardt v. Meyer, 153 Colo. 296, 385 P.2d 597 (1963), the court held that the grantees were estopped from relying on 
the warranty of their deed in an instance in which the grantees had drafted the 
purchase and sale agreement which provided that the exact boundary line would be 
determined by a survey to be completed by the seller. Relying upon that fact, 
the Colorado 
court concluded that the parties had intended the encumbrance to be excluded 
from the warranty in the deed. The facts in this case clearly are 
distinguishable from those in Reinhardt v. Meyer, supra. In this instance, the 
record does not demonstrate that the parties to the conveyance intended, or even 
contemplated, that the tract which the Bybees succeeded in claiming by adverse 
possession would be excluded from the warranties in the deed. Under these 
circumstances, the summary judgment against the Gonis cannot be justified by any 
theory of estoppel.

[¶13.]  As to the Baldwins, the Dubes submit two additional theories to 
support the summary judgment. First, the Dubes assert that the conveyance to the 
Baldwins was made by Dube Associates, a 
partnership consisting of Ronald Dube and another individual, and, therefore, 
Ronald Dube was entitled to summary judgment on any liability under the warranty 
deed. The record manifests unresolved factual disputes as to whether Dube 
Associates was served and became a party to this action. Even though the 
warranty deed delivered to the Baldwins shows Dube Associates as the grantor, 
Ronald Dube testified, in his deposition, that he personally sold the property 
to the Baldwins. The drawing of the proper 
inference from that discrepancy presents a question of material 
fact.

[¶14.]  Furthermore, § 17-13-305, W.S. 1977 and § 
17-13-307, W.S. 1977, provide for individual liability by Ronald Dube to the 
Baldwins, as grantees of the partnership. Those 
statutes, in pertinent part, provide as follows:

"Section 17-13-305. 
Partnership bound by partner's wrongful act or omission. "Where, by any wrongful 
act or omission of any partner acting in the ordinary course of the business of 
the partnership, or with the authority of his copartners, loss or injury is 
caused to any person, not being a partner in the partnership, or any penalty is 
incurred, the partnership is liable therefor to the same extent as the partner 
so acting or omitting to act. "Section 17-13-307. Liability of partners 
generally.

"(a) All partners are 
liable:

"(i) Jointly and 
severally for everything chargeable to the partnership under sections 13 [§ 
17-13-305] and 14 [§ 17-13-306];

"(ii) Jointly for all 
other debts and obligations of the partnership; but any partner may enter into a 
separate obligation to perform a partnership contract."

Given the facts 
of record and these statutes, Ronald Dube's individual liability to the 
Baldwins was not an appropriate matter for 
summary judgment based upon the law of partnerships.

[¶15.]  As a second basis for sustaining the 
summary judgment against the Baldwins, the 
Dubes contend that Dick Baldwin was not a party in interest. They rely upon his 
conveyance of his interest in the lot to his granddaughter. Dick Baldwin 
retained a mortgage on the lot, however, and he was required to defend in the 
quiet title action brought by the Bybees. A reference to Rule 25(c), W.R.C.P.,2 demonstrates that this argument of 
the Dubes has no merit. Dick Baldwin was a party in interest for purposes of the 
summary judgment.

[¶16.]  Analysis of the record with respect to 
the individual situations of the several appellants, demonstrates that either 
the law or genuine issues of material fact foreclose the entry of summary 
judgment against the appellants. The summary judgment must be 
reversed.

[¶17.]  Our holding with respect to the propriety 
of the summary judgment disposes of this case, but the appellants assert 
additional issues which could arise in the further consideration of this case in 
the district court. For that reason, we address them. E.g., Rocky Mountain Oil 
& Gas Association v. State, Wyo., 645 P.2d 1163 (1982); Madison v. Marlatt, Wyo., 619 P.2d 708 (1980); McGuire v. McGuire, Wyo., 
608 P.2d 1278 (1980).

[¶18.]  The Baldwins, Knudson and the Gonis argue 
that, in order to rule on the Dubes' motion for summary judgment, the trial 
court must have relied upon inadmissible parol evidence, in two critical areas, 
in order to demonstrate exceptions from the warranty covenants in the several 
deeds. The first of those relates to knowledge on the part of the grantees; the 
second relates to the boundaries of the property. The district court did not 
specify what facts it considered in awarding summary judgment to the Dubes. For 
that reason, we are not certain of the validity of this contention by the 
appellants, but we agree that any reliance by the trial court on parol evidence 
to vary or contradict the terms of the deeds would constitute 
error.

[¶19.]  The author of the textbook on real 
property relied upon earlier says: 

"Parol evidence is 
inadmissible to show exceptions to express covenants in a deed. Parol evidence 
is not admissible to show that a purchaser knew of the existence of an 
encumbrance or adverse right not referred to in the deed, and took the 
conveyance subject to it." 7 G. Thompson, Commentaries on the Modern Law of Real 
Property, supra, § 3186 at 311.

Furthermore, 
with respect to the boundaries, the encyclopedic treatment is a good statement 
of the general rule:

"Boundaries. The statements of a deed as 
to the boundaries of land have the same conclusiveness as any other portion of 
the description, and cannot be varied by parol or extrinsic evidence or by 
showing any understanding of the parties different from that expressed in the 
deed. Such evidence is not admissible to contradict or vary the statements in 
the deed as to the courses, distances, or calls; and a line supplied by 
necessary intendment cannot be varied by parol." 32A C.J.S. Evidence § 916 
(1964) at 290, 291, and the cases cited therein.

We assume that 
upon the trial of this case, these evidentiary rules will be regarded by the 
district court in addressing the issues presented by the 
case.

[¶20.]  Some further attempt could be made to 
invoke the remedy of summary judgment. For that reason, we consider the 
contention by the Baldwins, Knudson and the Gonis that the trial court abused 
its discretion by not adopting findings of fact pursuant to Rule 52(b), W.R.C.P. 
This issue was posed by their motion for amending of the judgment and for the 
making of findings of fact and conclusions of law. We hold that Rule 52, which 
provides for findings by the court, and amendment thereof, has no application to 
a motion for summary judgment under Rule 56, W.R.C.P. Rule 52, W.R.C.P., 
contains different language from Rule 52, F.R.C.P. Rule 52(a), F.R.C.P., 
specifically provides that findings of fact and conclusions of law are 
unnecessary upon the decision of a motion under Rule 56, F.R.C.P. This language 
is not included in Rule 52, W.R.C.P., but the justification for not requiring 
findings of fact is exactly the same. When a summary judgment is entered, there 
has been no trial of questions of fact but simply a determination that there is 
no genuine issue as to the material facts. Consequently, the finding of facts 
under Rule 52, W.R.C.P., is not appropriate. We recall that we have 
said:

"* * * We assume the 
district court had a reason for granting the motion for summary judgment and we 
would prefer that he had entered his reasons into the record. Absence from the 
record of a specific basis upon which summary judgment was sought or granted is 
a handicap to the reviewing court, although specific bases are not mandatory 
under the rule." Centrella v. Morris, Wyo., 
597 P.2d 958, 962 (1979).

While an 
articulation of the undisputed material facts to which the court applied the law 
in granting a summary judgment can be helpful, there is no abuse of discretion 
in failing to do so.

[¶21.]  Reversed and remanded for 
trial.

FOOTNOTES

1 Section 34-2-103, W.S. 
1977, states the effect of a conveyance by warranty deed:

"Every deed in substance 
in the above form [§ 34-2-102], when otherwise duly executed, shall be deemed 
and held a conveyance in fee simple, to the grantee, his heirs and assigns, with 
covenants on the part of the grantor, (a) that at the time of the making and 
delivery of such deed he was lawfully seized of an indefeasible estate in fee 
simple in and to the premises therein described, and had good right and power to 
convey the same; (b) that the same were then free from all encumbrances; and (c) 
that he warrants to the grantee, his heirs and assigns, the quiet and peaceful 
possession of such premises, and will defend the title thereto against all 
persons who may lawfully claim the same. And such covenants shall be obligatory 
upon the grantor, his heirs and personal representatives, as fully, and with 
like effect as if written at length in such deed."

2 Rule 25(c), W.R.C.P., 
provides:

"Transfer of interest. - In case of any 
transfer of interest, the action may be continued by or against the original 
party, unless the court upon motion directs the person to whom the interest is 
transferred to be substituted in the action or joined with the original party. 
Service of the motion shall be made as provided in subdivision (a) of this 
rule."