Opinion ID: 1727742
Heading Depth: 2
Heading Rank: 1

Heading: Reformation of the Mortvedt Deed.

Text: The Mortvedts contend the district court erred in failing to reform their deed to locate the boundary between their property (Parcel C) and that of the Orrs (Parcel B) at the water's edge on the west side of the lake. As the parties seeking reformation, the Mortvedts introduced evidence and requested a finding that their deed does not describe the intended boundary line. See Kendall v. Lowther, 356 N.W.2d 181, 187 (Iowa 1984) (stating that the party seeking reformation bears the burden of establishing by clear and convincing evidence that a written instrument fails to reflect the contracting parties' intent). The Mortvedts offered evidence tending to prove their grantor intended the water's edge on the west side of the lake would be the eastern boundary of the property conveyed to the Mortvedts. This evidence included the contract between the grantor-estate and the Mortvedts describing the property to be conveyed as [i]ncluding all land west and north of [the] water. The Mortvedts also offered the testimony of Loren Twedt, a co-executor of the grantor-estate, and Eldon Boswell, a realtor for the estate, who both affirmed such intent. The plaintiffs objected to the Mortvedts' offer of the real estate contract and the testimony of Mr. Boswell and Mr. Twedt on the grounds that such evidence violated the parol evidence rule and the statute of frauds. In its decision rejecting the Mortvedts' prayer for reformation of their deed, the district court concluded Boswell's testimony and the real estate contract violated both the parol evidence rule and the statute of frauds. The court also concluded the remedy of reformation is not available to the Mortvedts because the Orrs, whose property interest in the disputed strip of land would be directly affected if the remedy were granted, were not parties to the Mortvedts' deed. We need not address the Mortvedts' contention that the district court erred in its ruling on the parol evidence and statute of frauds objections because the district court correctly concluded the remedy of reformation is unavailable to the Mortvedts under the circumstances of this case. We will only order reformation of a deed against a party to it, a person in privity with a party, or a person with notice of the relevant facts. See Burner v. Higman & Skinner Co., 133 Iowa 315, 316, 110 N.W. 580, 580 (1907). Reformation will not be ordered to the prejudice of innocent third persons. 76 C.J.S. Reformation of Instruments § 54 (1994); see also Lee v. Brown, 482 So.2d 293, 297 (Ala.1985) (declining to reform a deed to the detriment of an adjoining landowner who was an innocent purchaser); Statler v. Painter, 84 Ark.App. 114, 133 S.W.3d 425, 429 (2003) (same); Schlenz v. Dzierzynski, 134 Ill.App.3d 937, 89 Ill.Dec. 736, 481 N.E.2d 287, 290 (1985) (same); Chandelle Enters. LLC v. XLNT Dairy Farm, Inc., 282 Wis.2d 806, 699 N.W.2d 241, 247-48 (Ct.App.2005) (same). Notwithstanding the Mortvedts' assertions to the contrary, we find the Orrs were innocent third parties as to the transaction between the Twedt estate and the Mortvedts. Stumbo & Associates Land Co. was hired to prepare a survey when the Mortvedts purchased their land from the Twedt estate in 1996. That survey of Parcels B and C describes the real estate by metes and bounds and denotes the boundary between the parcels as a straight line running from essentially north to south, as shown on the illustration below: The legal description of Parcel C in the Mortvedts' deed to Parcel C refers expressly to the Stumbo survey. The Mortvedts contend, however, that the Stumbo survey put the Orrs on inquiry notice of the Mortvedts' claim that the boundary between the two parcels is marked by the water's edge rather than the straight, solid boundary line shown on the survey. The Mortvedts support their position by reference to a dotted line denominated by the surveyor as edge of water and drawn on the survey adjacent to the straight, solid line to illustrate the approximate location of the water's edge on the west side of the lake. Although the survey did note in this way the approximate location of the water's edge in relation to the east boundary line identified in the Mortvedts' deed, we conclude the Orrs were not on inquiry notice of any mutual mistake made by the grantor-estate and the Mortvedts in the deed's description of that boundary line. A reasonably prudent person would interpret the survey as an illustration of the boundary legally described in the Mortvedts' deed and as confirmation that the Mortvedts had not acquired from their grantor the narrow strip of land on the west side of the lake that is the subject of this dispute. Nothing stated or illustrated in the Mortvedts' recorded deed and survey would cause a prudent subsequent purchaser to further inquire into the deeding parties' intentions and to consequently discover any discrepancy between those intentions and the legal description in the deed. See Bedford v. Kravis, 622 So.2d 291, 295 (Miss.1993) ([I]f in any . . . deed or conveyance there is contained any recital sufficient to put a reasonably prudent man on inquiry as to the sufficiency of the title, then he is charged with notice of all those facts which could and would be disclosed by a diligent and careful investigation. (emphasis removed)); 76 C.J.S. Reformation of Instruments § 58 ([A] party is not an innocent purchaser if he . . . was conscious of having the means [to discover a mutual mistake] and did not use them as an ordinarily prudent and diligent person would have done, or if there were circumstances sufficient to put him on inquiry [notice of the deeding parties' mistake].); cf. Luker v. Moffett, 327 Mo. 929, 38 S.W.2d 1037, 1041-42 (1931) (reforming a deed where a purchaser was on inquiry notice of the boundary line). Indeed, contrary to the Mortvedts' contention, the survey and deed taken together would lead a reasonable person to believe the Mortvedts' east boundary did not extend to the water's edge. The surveyor's notation of the edge of water provided express notice on the face of the survey that the metes and bounds description of the property purchased by the Mortvedts did not extend eastward to the edge of the water. Because the Orrs were not on inquiry notice of the claimed mistake in the legal description within the Mortvedts' deed, they were innocent purchasers whose property interest in the narrow strip of land at issue in this case cannot be compromised by reformation of the Mortvedts' deed. Our resolution of this issue dictates that we must affirm the district court's determination that the Mortvedts have no claim for damages as a consequence of Stephen Orr's removal of trees from the narrow strip of land on the west side of the lake.