Opinion ID: 2634894
Heading Depth: 1
Heading Rank: 6

Heading: Breach of Warranty Deed

Text: [¶ 27] A warranty deed is a contract. Thus: [w]e interpret a warranty deed like a contract from specific language of the deed, and begin by looking at the instrument itself. We must first examine the terms of the deed and give them their plain and ordinary meaning. Plain meaning is that meaning which [the] language would convey to reasonable persons at the time and place of its use. When the provisions in the contract are clear and unambiguous, the court looks only to the four corners of the document in arriving at the intent of the parties. Determining the parties' intent is our prime focus in interpreting or construing a contract. Gilstrap v. June Eisele Warren Trust, 2005 WY 21, ¶ 12, 106 P.3d 858, 862 (Wyo.2005) (internal citations omitted). See also Boley v. Greenough, 2001 WY 47, ¶ 11, 22 P.3d 854, 858 (Wyo.2001). [¶ 28] When a person conveys property by warranty deed, generally the property is conveyed free of all encumbrances. Wyo. Stat. Ann. § 34-2-103(b) (LexisNexis 2007). Consequently, any encumbrances on the seller's title needs to be specifically listed and excluded from the warranty. Otherwise, the seller will be in breach of the warranty. [¶ 29] In this case, the Ellises conveyed their property subject only to ... easements, restrictive covenants, and reservations of record. The common use rights are not expressly excepted. Questions of material fact exist as to whether the common grazing rights are of record. Questions of material fact also exist as to the extent the Agreement encumbers Foxley's private land. The breach of warranty claim cannot be decided without first answering these questions of material fact. [¶ 30] The Ellises, relying on Gilstrap v. June Eisele Warren Trust, 2005 WY 21, 106 P.3d 858 (Wyo.2005), argue a breach of warranty can only occur when the buyer suffers an actual or constructive eviction. This would be true if Foxley was claiming a breach of the warranty of quiet and peaceful possession. The issue in Gilstrap involved the consequences of an attempt to grant more property than one owns. As the opinion unfolded, the breach of warranty issue under the circumstances in Gilstrap would have been for a breach of quiet and peaceful possession. It was in this context that this Court noted, to prove breach of warranty, it would be necessary to show actual or constructive eviction. Id. at ¶ 27, 106 P.3d at 866. [¶ 31] Foxley, on the other hand, is alleging a breach of the warranty against encumbrances. A covenant of title which warrants that the premises are free from encumbrances is an agreement to indemnify the covenantee in the event that he or she suffers any loss to the value of the premises due to the existence of an encumbrance. An encumbrance is any right or interest existing in a third person which diminishes the value of the estate to the grantee, but which is consistent with the passage of the estate to the grantee.     Encumbrances can usually be classified as one of three types: (1) servitudes, (2) encumbrances, as that term is used in its more technical sensei.e., liens or charges on the land, and (3) present or future estates which may be carved out of the estate conveyed.     A servitude generally affects the land or its use and enjoyment physically. It reduces the value of the land because a purchaser will not pay as much for a parcel of land which is limited in its usage as he or she would for an unencumbered one. 14 Richard R. Powell, The Law of Real Property § 81A.06[2][c][i] and [ii], at 117-18 (Michael Allan Wolf, ed., 1997). As we have already discussed, common grazing rights, a profit, fit within the general category of a servitude. The warranty is against the diminution in value of the land caused by the servitude, not total loss of land. Whether the Ellises breached this warranty is dependent on all the issues of material fact we have previously noted.