Opinion ID: 2623510
Heading Depth: 2
Heading Rank: 2

Heading: deed reformation

Text: ¶ 32 The next issue on appeal is whether the trial court erred in finding that the parties to the 1967 transaction intended to transfer a particular acreage rather than a specific parcel of land, and in reforming the deed to conform with that intent. The trial court held that the 1967 deed contained a mutual mistake in that it purported to convey 75.8 acres of land but in reality conveyed ten acres less. The court also found that [t]he parties intended to transfer about seventy-five acres as evidenced by the plain language of the warranty deed, the Real Estate Contract, and the Surveyor's Certificate. The trial court further found that [t]his intent to transfer seventy-five acres [was] also shown by the purchase price. ¶ 33 Regarding the placement of the eastern boundary, the trial court explained: The Moser description can be made to close in two different ways: (i) by extending the 807.5 foot call from the point of beginning along the then existing (in 1967) fence line, which forms the northern boundary of the parcel, to a distance needed to close the description, or (ii) by shortening the 927.7 [foot] call along the southern boundary of the parcel so that the description closes. The first method, according to the record, would create a parcel containing approximately 73.028 acres, and the second method would leave the partnership with fewer than sixty-five acres. ¶ 34 Based on its finding that the parties intended to convey seventy-five acres, the trial court reformed the deed according to option (i), which shifted the eastern boundary about 100 feet to the east, extended the south boundary to 927.7 feet, and lengthened the north boundary (the reformed boundary). The trial court explained that [r]eforming the warranty deed in this way will reflect the intent of the parties and noted that [t]his description will come closer to the existing fence ... and is closer to seventy-five acres than the description urged by Veibell. ¶ 35 Reformation of a deed is a proceeding in equity. Hottinger v. Jensen, 684 P.2d 1271, 1273 (Utah 1984). While it is settled that in cases at law, an appellate court will review a trial court's findings of fact under a clearly erroneous standard, State v. Pena, 869 P.2d 932, 935 (Utah 1994), in cases in equity, some confusion still exists over the proper standard of review for a trial court's findings of fact. In equity cases, appellate courts have often applied a clear preponderance standard. See Spears v. Warr, 2002 UT 24, ¶ 23, 44 P.3d 742; Horton v. Horton, 695 P.2d 102, 105 (Utah 1984); Jensen v. Brown, 639 P.2d 150, 151-52 (Utah 1981); Del Porto v. Nicolo, 27 Utah 2d 286, 495 P.2d 811, 812 (1972). Nevertheless, there is also a recent trend in equity cases to review findings of fact under the clearly erroneous standard. See, e.g., MacKay v. Hardy, 896 P.2d 626, 629 (Utah 1995); Bellon v. Malnar, 808 P.2d 1089, 1092 (Utah 1991); Bountiful v. Riley, 784 P.2d 1174, 1175 (Utah 1989). Truth be told, there is little, if any, difference between these two standards. Jensen, 639 P.2d at 152 (In substance, [the clear preponderance standard] is the same standard applied in those cases which state that we reverse only when the trial court's finding is against the clear weight of the evidence.). In the interests of simplicity, therefore, we hold that the proper standard of review for a trial court's findings of fact for cases in equity is the same as for cases at law, namely the clearly erroneous standard. Moreover, in both equity and law, we review the trial court's conclusions of law for correctness. Pena, 869 P.2d at 936; Bellon, 808 P.2d at 1092. ¶ 36 Reformation of a deed is appropriate where the terms of the written instrument are mistaken in that they do not show the true intent of the agreement between the parties. There are two grounds for reformation of such an agreement: mutual mistake of the parties and ignorance or mistake by one party, coupled with fraud by the other party. Hottinger, 684 P.2d at 1273. ¶ 37 This case involves a mutual mistake by the parties. Mutual mistake of fact may be defined as error in reducing the concurring intentions of the parties to writing. Naisbitt v. Hodges, 6 Utah 2d 116, 307 P.2d 620, 623 (1957). The metes and bounds description in the 1967 deed fails to close, and it purports to convey 75.8 acres, more or less, whereas the property conveyed contains only 64.5 acres. The trial court and the parties agreed that these discrepancies in the deed constitute a mutual mistake. ¶ 38 Once a mutual mistake has been shown, the intention of the parties is the controlling consideration in reforming a deed. Losee v. Jones, 120 Utah 385, 235 P.2d 132, 137 (1951) (looking to the intent of the parties to reform a deed in which the metes and bounds description failed to close the property). Reformation is not available to rewrite a contract to include terms never contemplated by the parties. Cunningham v. Cunningham, 690 P.2d 549, 552 (Utah 1984), overruled on other grounds by State v. Mead, 2001 UT 58, ¶ 43, 27 P.3d 1115. Extrinsic evidence is admissible to assist in determining the intent of the parties. 66 Am.Jur.2d Reformation of Instruments § 114 (2001) ([I]n suits to reform written instruments on the ground of fraud or mutual mistake, parol and other extrinsic evidence is admissible ... to show how the writing should be corrected in order to conform to the agreement or intention which the parties actually made or had.) (citations omitted); see Naisbitt, 307 P.2d at 623-24 (determining the intent of the parties from conversations between adjoining landowners, possession of the property, and the lack of objection to the mistaken boundary). ¶ 39 Before reviewing the trial court's determination of the parties' intent, we must determine whether the principles of deed construction are applicable in a reformation proceeding.
¶ 40 The Partnership contends that in the context of a reformation claim, it is inappropriate to apply the rules of deed construction. We find this argument unpersuasive. Whereas a reformation action is an action in equity, deed construction is a proceeding in law. Hartman v. Potter, 596 P.2d 653, 656 (Utah 1979) (In the absence of ambiguity, the construction of deeds is a question of law for the court....). In an action to construe a deed, the court will determine the parties' intent from the plain language of the four corners of the deed. Ault v. Holden, 2002 UT 33, ¶ 38, 44 P.3d 781. A court may also look to extrinsic evidence if the deed is ambiguous. 23 Am. Jur.2d Deeds § 192 (2001) (Extrinsic evidence is admissible to illuminate the intent of the parties if the terms of a deed are ambiguous.). ¶ 41 Some property disputes may be resolved through either a construction or a reformation analysis. See, e.g., Knutson v. Reichel, 10 Wash.App. 293, 518 P.2d 233, 236 (1973) (While the trial court considered the problem as one of ambiguity warranting reformation of the deed, and we have viewed it as one of construction, the result is the same.). Nevertheless, it is important to recognize that deed construction is distinct from deed reformation. Williams v. Oldroyd, 581 P.2d 561, 563 (Utah 1978) (Applying rules of construction, however, does not constitute reformation of a deed.); Doman v. Brogan, 405 Pa.Super. 254, 592 A.2d 104, 109 n. 6 (1991) (Deed `construction' should not be confused with deed `reformation,' whereby a Court of Equity might rewrite the written word based on clear, precise and indubitable evidence of mutual mistake or fraud.). Recognizing the distinction between the two claims is important because a court of law's ability to construe a deed is more limited than a court of equity's ability to reform a deed. In construction cases, a court is limited to interpreting only the language contained in the deed. See Park v. Wilkinson, 21 Utah 279, 60 P. 945, 946 (1900) (The words used in the deed should be construed so as to ascertain the intention of the parties making it.); Padilla v. City of Santa Fe, 107 N.M. 107, 753 P.2d 353, 356 (Ct.App.1988) (A court may not, in effect, reform a deed when attempting to interpret or construe it.); Cont'l Oil Co. v. Doornbos, 402 S.W.2d 879, 882 (Tex.1966) (reversing the trial court's insertion of a term not originally included in a deed because under guise of seeking a construction of the deed ..., the plaintiffs were actually seeking, and the judgment actually grants, reformation of the deed). In a reformation proceeding, however, a court of equity has the authority to add new terms to a deed or alter the original language of a deed to conform to the parties' intent. See, e.g., Hottinger, 684 P.2d at 1273 (reforming a property description to describe a boundary that was not contained in the original description). ¶ 42 Appealing to this distinction between reformation and construction, the Partnership argues that the rules of construction are inapplicable to a reformation claim. However, while a court may not reform a deed under the guise of deed construction, there is no analogous limitation on applying the rules of construction in a reformation claim. The controlling consideration in a reformation claim is the intent of the parties. Losee, 235 P.2d at 137. The rules of construction are time-proven principles and presumptions that courts have developed to assist in extrapolating the intent of the parties from a document. See Chournos v. D'Agnillo, 642 P.2d 710, 712 (Utah 1982) (The paramount rule of construction of deeds is to give effect to the intent of the parties ... as expressed in the deed as a whole.); 23 Am.Jur.2d Deeds § 192 (When, and only when, the meaning of a deed is not clear, or is ambiguous or uncertain, will a court resort to established rules of construction to aid in the ascertainment of the grantor's intention .... citations omitted). Because the rules of construction assist in ascertaining the intent of the parties, their consideration is relevant and permissible in a reformation claim. See, e.g., Lentini v. Hager, 47 Northumb. L.J 200, 73 Pa. D. & C.2d 71 (1975) (applying rules of deed construction in a proceeding in equity to reform a deed). If we were to adopt the rule that the Partnership encourages, we would limit the court's ability to look to and interpret the most valuable piece of evidence of the parties' intent: the conveying instrument itself. Thus, we see no reason why the application of the rules of construction should be prohibited in a reformation claim as the Partnership contends.
¶ 43 The first issue that the discrepancies in the 1967 deed raise is whether the parties' primary intent was to convey 75.8 acres or to convey property with specifically defined boundaries. The parties to the 1967 deed either intended to convey 75.8 acres and chose the boundaries accordingly, or they chose the boundaries of the property they intended to convey and calculated the acreage accordingly. The trial court erred in concluding from the evidence that the parties intended to transfer about seventy-five acres, rather than property along specific boundaries. ¶ 44 To determine the parties' intent, we look first to the terms of the 1967 deed. In deed construction, metes and bounds descriptions prevail over acreage. A statement of quantity ordinarily adds nothing to a particular description except where the grantor has unequivocally expressed an intention to pass only a certain quantity of land. David A. Thomas & James H. Backman, Thomas and Backman on Utah Real Property Law § 13.05(b)(7)(i)(D)(5) (1999). The property description in question defines the boundaries with specificity and contains no unequivocal expression of intent to convey a specific quantity of land. Rather, the placement of the sentence, Containing in all 75.8 acres, more or less, after the metes and bounds description indicates that the acreage was a calculation of the quantity of land described by the metes and bounds description. The inclusion of the phrase more or less bolsters this position. 23 Am.Jur.2d Deeds § 251 (General references to quantity, within the context of more specific descriptions of the property, are not a controlling factor as to the area of land conveyed or... in a deed. This principle is especially operative where the land is represented to contain a certain number of acres `more or less.' (footnotes omitted)). Therefore, the language of the 1967 deed evidences that, while the parties may have believed they were conveying 75.8 acres, they primarily intended to transfer property along specific boundaries. ¶ 45 Our analysis on this point, however, is not limited exclusively to principles of deed construction. Extrinsic evidence further confirms that the parties' primary intent was to convey property defined by specific boundaries, not to convey a specific acreage. ¶ 46 In finding that the parties intended to convey seventy-five acres, the trial court weighed the fact that the purchase price was calculated on a per acre basis multiplied by 75.8 acres. However, the universal convention in transfers of real property is to base payment on quantity. Thus, it is doubtful that the parties negotiated a purchase of 75.8 acres as opposed to merely calculating the purchase price in reliance on the mistaken property description contained in the deed. The trial court further found that the Ericksens' payment of property taxes on seventy-five acres over the years evidenced intent to convey 75.8 acres. However, the property taxes were also assessed in reliance on the deed's mistaken acreage statement. The purchase price and the payment of taxes, if anything, support the conclusion that the parties believed that property transferred contained 75.8 acres, not that the primary intent of the parties was to transfer 75.8 acres. ¶ 47 Perhaps the best extrinsic evidence of the parties' intent is Alton Veibell's testimony that he and Durell Ericksen negotiated specific boundaries and never discussed a conveyance of a specific number of acres in negotiating the 1967 transaction. In light of this testimony, and the language of the 1967 deed, the trial court's finding that the parties intended a transfer of about 75.8 acres is clearly erroneous. We conclude instead that the parties intended a transfer of property along specific boundaries.
¶ 48 Having found that the parties negotiated a conveyance along specific boundaries, the second question we must resolve is where the parties intended to place the eastern boundary of the conveyed property. As the trial court noted, the property description in the 1967 deed can be made to close by either (i) extending the northern boundary, which shifts the eastern boundary further east, or (ii) shortening the 927.7 foot call of the southern boundary, which leaves the eastern boundary in the position described by the deed. Undoubtedly, the parties intended the property description to close; however, the language of the deed provides little insight into which option the parties intended. ¶ 49 The trial court chose the first option, noting that it reflect[ed] the intent of the parties to transfer about seventy-five acres. The trial court never found, however, that the parties intended the eastern boundary to be located in the position described in the first option. In fact, the preponderance of the evidence indicates that the parties intended the second option. ¶ 50 The Partnership argues that the record boundary effectively renders the southeast corner of the Partnership's property inaccessible from its own property due to a large gully that cuts across that corner. Moving the eastern boundary further to the east would allow the Partnership to access the southeast corner over its own property. It is reasonable to assume that Durell Ericksen would have negotiated a boundary that allowed him to access all of his property over his own land. This is the sole fact presented at trial that clearly supports the conclusion that the parties intended the boundary to be further east than the record boundary. ¶ 51 In contrast, there is substantial evidence that the parties to the 1967 transaction intended a transfer of property along the record eastern boundary. Alton Veibell, the only remaining living party to the 1967 transaction, testified that he and Durell Ericksen negotiated and mutually agreed upon the placement of the eastern boundary as it is actually described in the 1967 deed. Veibell described in detail the facts surrounding their negotiations, and the Partnership presented no evidence to refute his testimony. Additionally, the location of the survey pin belonging to Edwin Moser, the surveyor hired to survey the property in 1967, indicates that Moser did not err in calculating the length of the northern boundary and thus that the eastern record boundary is consistent with the parties' intent. ¶ 52 The trial court mistakenly reformed the eastern boundary to lie closer to the existing [Willow Creek] fence line. Both Veibell and Paul Palmer testified that the southern portion of the fence was a fence of convenience that was intentionally not placed on the true boundary to allow the Ericksens' livestock to access Willow Creek. Thus, the testimony regarding the placement of the fence instead supports the conclusion that the parties intended to locate the eastern boundary over fifty feet west of the southern portion of the fence, in a position closer to that described by the 1967 deed. ¶ 53 After weighing the evidence presented at trial in light of our conclusion that the parties erroneously believed they were transferring seventy-five acres, we hold that the trial court's determination that the parties intended to transfer property along the reformed boundary is clearly erroneous. Rather, the evidence indicates that the parties intended to transfer property along the specific eastern boundary described in the 1967 deed.
¶ 54 Having determined the proper placement of the eastern boundary, we are still left with the question of how to reform the deed to close the property description. Where the parties intended to convey property along specific boundaries but the deed description fails to close, a court in equity may reform the deed to cause the description to close. Naisbitt v. Hodges, 6 Utah 2d 116, 307 P.2d 620, 624 (1957) (reforming a deed that failed to close); see also Ault v. Holden, 2002 UT 33, ¶¶ 26-30, 44 P.3d 781 (closing a faulty deed description in a construction proceeding). Reformation is appropriate because the parties intended the boundaries of the conveyed property to close. ¶ 55 The 1967 deed describes the southern boundary as follows: [T]hence West 927.7 feet along said South line of Section 23, to the N-S centerline of said Section 23. As is, the southern boundary description extends over 100 feet beyond the N-S centerline, onto property that Veibell did not own at the time of the transfer and could not have intended to include in the transfer. Because Veibell did not own and thus could not convey property beyond the N-S centerline and because monuments take precedence over distance, the call to the N-S centerline is more reliable than the 927.7 foot call of the southern boundary. See Park v. Wilkinson, 21 Utah 279, 60 P. 945, 946 (1900) (In a conveyance by natural monuments, distances and quantity, being the most uncertain, must yield to the former.); Thomas & Backman, supra, ¶ 44, § 13.05(b)(7)(i)(D)(8) (The special locative calls are more precise and particular and thus prevail over the descriptive calls in case of conflict.). We therefore hold that the deed description of the southern boundary be reformed to read thence West 816.75 feet along said South line of Section 23, to the N-S centerline of said Section 23 so that the property description closes. The 1967 deed thus conveyed 64.5 acres instead of 75.8 acres as the deed purports.