Title: STUMP v. CHEEK

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

STUMP v. CHEEK  STUMP v. CHEEK 2007 OK 97 179 P.3d 606 Case Number: 103554 Decided: 12/12/2007 THE SUPREME COURT OF THE STATE OF OKLAHOMA JAMES CLAYTON STUMP, Trustee of the James Clayton Stump Revocable Intervivos Trust, Plaintiff/Appellant, v. GEORGE A. CHEEK and DIANA M. CHEEK, Defendants/Appellees, and CLINTON B. KEATING and RUTH M. KEATING, Third Party Defendants, and DONALD RAY MEINTS, RENE CHERYL MEINTS, RONALD W. GARRETT, LINDA N. GARRETT, FLOYD H. DECOU, and ALBERTINE DECOU. Third Party Defendants. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION III Honorable Robert G. Haney, Trial Judge ¶0 The appellant, James Clayton Stump (Stump) prevailed in a quiet title action against the appellees, George A. and Diana M. Cheek, and moved for an award of attorney fees, costs, and expenses under the Nonjudicial Marketable Title Procedures Act (the NMTPA), CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS OPINION VACATED; TRIAL COURT REVERSED AND REMANDED WITH DIRECTIONS. Byron D. Todd, Tulsa, Oklahoma, for Plaintiff/Appellant. Mark W. Kuehling, Oklahoma City, Oklahoma, for Defendants/Appellees. KAUGER, J.: ¶1 The question presented is whether the trial court erred in denying the appellant's motion for attorney fees, costs, and expenses under the Nonjudicial Marketable Title Procedures Act, FACTS ¶2 This appeal arises from an action to quiet title to a disputed tract of real property located on Grand Lake in Delaware County, Oklahoma. The tract is a 20' x 30' portion of Lot 5, Block 1 of the subdivision of Lakeport, Oklahoma (Disputed Tract). ¶3 In 1952, the appellant, James Clayton Stump (Stump/requestor), and his father, C.H. Stump, obtained Ousterhout's undivided one half interest in Lot 8, Block 1, the west thirty feet of Lot 7, Block 1, and the disputed tract as joint tenants. In 1964, Stump and his wife, LaVerna Stump, obtained Housley's one-half interest in Lot 8, Block 1, the west thirty feet of Lot 7, Block 1, and the disputed tract as joint tenants. By May 12, 1999, both C.H. Stump and LaVerna Stump had died, and Stump held the property in fee simple. On February 9, 2001, Stump conveyed his interest in the property to the James Clayton Stump Revocable Intervivos Trust (Stump Trust), of which Stump is the trustee. ¶4 At some time prior to 1992, third party defendants Clinton B. Keating and Ruth M. Keating (the Keatings), became involved in a dispute with third party defendants Floyd and Albertine DeCou over ownership of parts of Lots 4 and 5, Block 1 of the Lakeport subdivision. On September 24, 1992, the Keatings entered an agreed journal entry of judgment (Keating judgment) that found that the Keatings held title to portions of Lots 4 and 5, Block 1 of the Lakeport subdivision. Stump and his predecessors in title to the disputed tract were not named parties to the Keating judgment. The portion of Lot 5 described in the Keating judgment overlapped the disputed tract. On January 8, 1993, the Keatings conveyed a portion of Lot 5 to the appellees, George A. Cheek and Diana M. Cheek (the Cheeks), by warranty deed. The portion of Lot 5 conveyed by this deed overlapped the disputed tract. ¶5 Stump discovered this apparent cloud on his title in 2003. On January 15, 2003, he made a written request asking the Cheeks to remove the cloud by filing a quitclaim deed to the disputed tract and enclosed a quitclaim deed that he had prepared. The Cheeks declined Stump's request. On June 10, 2003, Stump, as trustee of the Stump Trust, filed a petition to quiet title to the disputed tract. ¶6 On January 5, 2006, the trial court granted Stump's motion for summary judgment, finding that Stump, as trustee of the Stump Trust, held title to the disputed tract in fee simple. The trial court reserved making a finding on the issue of attorney fees, costs, and expenses. On June 8, 2006, the trial court entered an order denying attorney fees, costs, and expenses to Stump, finding that the NMTPA did not permit a prevailing party to recover attorney fees, costs, and expenses if the prevailing party's claim was based on a judgment of a court of competent jurisdiction. ¶7 Stump appealed, filing his petition in error on July 10, 2006. On February 14, 2007, the cause was assigned to the Court of Civil Appeals. On March 16, 2007, the Court of Civil Appeals affirmed the ruling of the trial court, finding that the NMTPA excluded an award of attorney fees, costs, and expenses in an action to remove an apparent cloud on title based on a judgment of a court of competent jurisdiction. On April 5, 2007, Stump petitioned the Court of Civil Appeals for rehearing, which was denied on April 18, 2007. On May 8, 2007, Stump petitioned this Court for certiorari, which was granted on September 11, 2007. I. ¶8 THE NONJUDICIAL MARKETABLE TITLE PROCEDURES ACT DOES NOT PREVENT A PREVAILING PARTY WHO HAS OTHERWISE COMPLIED WITH THE ACT FROM RECOVERING ATTORNEY FEES, COSTS, AND EXPENSES WHEN THE CLOUD ON TITLE UNDERLYING THE ACTION ARISES FROM A JUDGMENT. ¶9 The first issue presented is one of statutory construction, which is a question of law that we review de novo and over which we exercise plenary, independent and non-deferential authority. ¶10 The NMTPA is found at ¶11 The Cheeks argue that although Stump is the prevailing party, he is not entitled to attorney fees, costs, and expenses because the NMTPA does not allow an award for a claim based on a judgment. Stump argues that the NMTPA contains no exception for a claim based on a judgment, and that he is entitled to an award of attorney fees, costs, and expenses as a prevailing party if he complied with the Act. ¶12 Section 1141.3(A) provides in pertinent part: Any person or entity . . . may use the procedures authorized by this act to attempt to remove a cloud or an apparent cloud on the title of the real property by requesting a respondent to prepare a curative instrument or to take corrective action. [Emphasis added.] The term "apparent cloud" is defined at §1141.2(1), which provides: "Apparent cloud" means an effect, without a judgment of a court of competent jurisdiction, which in the good faith opinion of a requestor results in a condition of title to real property located in the State of Oklahoma that fails to meet the standard of "marketable title" as defined by the "Oklahoma Title Examination Standards" as adopted and revised by the House of Delegates of the Oklahoma Bar Association. [Emphasis added.] Stump argues that the phrase "without a judgment of a court of competent jurisdiction" does not modify the word "effect," but instead the entire text of §1141.2(1). He insists that the definition does not create any exception for clouds arising out of judgments, but simply refers to clouds on title that have not yet been verified as such by a judgment which quiets title in the requestor. The Cheeks argue that the phrase creates an exception for any title defect that arises from a judgment, and that the NMTPA does not allow an award of attorney fees, costs, and expenses to a prevailing party in a quiet title action if the title defect underlying the action is created by a judgment. ¶13 Oklahoma follows the American Rule concerning the recovery of attorney fees. It provides that each litigant pay for legal representation and that courts are without authority to assess attorney fees in the absence of a specific statute or contract. Exceptions to the Rule are narrowly defined because attorney fee awards against the non-prevailing party have a chilling effect on open access to the courts. ¶14 In order to avoid judicially imposing a different meaning from that the Legislature intended, courts will not place a strained construction on the plain words of a statute. ¶15 The difficulty of these sections of the NMTPA is that while the terms "cloud" and "apparent cloud" are listed, only the latter is defined. Because the Legislature included the general term "cloud," and certainly did not intend it to be meaningless, we must give the term its plain and ordinary meaning. A marketable title is one free from apparent defects, grave doubts and litigious uncertainty, and consists of both legal and equitable title fairly deducible of record. ¶16 Title defects can and do arise from judgments, as in this cause, where the cloud was created by the incorrect legal description contained in the judgment. If we were to adopt the Cheeks' interpretation of §1141.2(1), a requestor could be awarded fees under the NMTPA if the apparent cloud on title arose from an incorrect legal description in a deed, but not if the apparent cloud arose from an incorrect legal description in a judgment quieting title, a judgment in a foreclosure, a divorce decree or a probate decree. The Legislature's purpose of encouraging resolutions of title disputes by curative instruments instead of through litigation would be frustrated by only permitting awards of attorney fees, costs, and expenses in cases where the apparent cloud does not arise from a judgment. Even if we were to adopt the Cheeks' interpretation of "apparent cloud," the NMTPA still does not exclude actions based on a "cloud," and title defects which arise from judgments would fall under the broader definition of "cloud." Thus, we would render §1141.2(1) meaningless because its definition of "apparent cloud" would be subsumed by the definition of "cloud." ¶17 We find that the meaning of "apparent cloud" under §1141.2(1) which is least strained and that best follows the intent of the Legislature is as follows: an "apparent cloud" is an effect which, in the good faith opinion of a requestor, results in a condition of title to real property located in the State of Oklahoma that fails to meet the standard of "marketable title" as defined by the Oklahoma Title Examination Standards, despite the fact that the effect has not yet been adjudicated as such by a judgment of a court of competent jurisdiction. The NMTPA does not exclude Stump from eligibility for an award of attorney fees, costs, and expenses because the cloud on the title to the disputed tract arose from an incorrect legal description in a judgment. II. ¶18 THE TRIAL COURT FAILED TO ADDRESS WHETHER STUMP COMPLIED WITH THE PROVISIONS OF THE NONJUDICIAL MARKETABLE TITLE PROCEDURES ACT. ¶19 The Cheeks allege that because Stump did not comply with the requirements of the NMTPA, he cannot be awarded attorney fees, costs, and expenses as a prevailing party. The Cheeks allege that: 1) Stump did not respond to their request for clarification of the curative instrument sent to them; and 2) the curative instrument Stump sent did not conform exactly to the actual relief granted by the court, because had the Cheeks executed Stump's curative instrument, they would have relinquished any right to maintain a boat dock situated in front of the disputed tract. Stump maintains that he complied with the NMTPA, but responds that because the trial court did not address the issue of his compliance in the order appealed, this Court may not review the question. ¶20 The trial court interpreted §1141.2(1) as forbidding an award because the cloud on the disputed tract arose from a judgment to quiet title, . . . The statute relied upon by Plaintiff does not apply to title defects arising from a judgment of a court of competent jurisdiction. As a result, the Plaintiff is not entitled to recover its costs and attorney fees from the Cheeks. The court further finds that based on the determination that the statute does not apply to this action, it is unnecessary to address the other issues and defenses raised by the Cheeks. . . . ¶21 We will not exercise our appellate jurisdiction to make first instance determinations on disputed questions of fact or law. CONCLUSION ¶22 The purpose of the NMTPA is to encourage parties to settle title disputes through curative instruments rather than through quiet title actions. It achieves this purpose by mandating an award of attorney fees, costs, and expenses to a prevailing party in a quiet title action who has first attempted to resolve the matter with a curative instrument in accordance with the Act. To construe the NMTPA as forbidding an award of attorney fees, costs, and expenses in quiet title actions where the cloud on title arises from a judgment would frustrate the purpose of the Act. The order of the trial court is reversed and is remanded for further proceedings consistent with this opinion. CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS OPINION VACATED; TRIAL COURT REVERSED AND REMANDED WITH DIRECTIONS. EDMONDSON, V.C.J., and HARGRAVE, OPALA, KAUGER, TAYLOR, COLBERT, REIF, J.J., concur. WATT, J., (by separate writing), concurs in part and dissents in part. WINCHESTER, C.J., dissents. FOOT