Opinion ID: 1133807
Heading Depth: 1
Heading Rank: 4

Heading: Whether the trial court erred in entering a summary judgment in favor of the Casseses on all claims.

Text: The Boyces also appeal from the summary judgment entered in favor of the Casseses on the Boyces' claims of fraudulent misrepresentation, fraudulent suppression, conspiracy, and breach of the warranty deed. We reverse the summary judgment on the breach-of-warranty-deed claim and the claim for indemnity. We affirm as to all other counts. We first address the claims of fraudulent misrepresentation and suppression. The Boyces claimed that during the negotiations concerning the property, Mr. Cassese falsely represented that there were no encumbrances against the property of which the Boyces should be apprised. The Boyces also assert that Mr. Cassese failed to disclose the fact that he and his wife had just executed the amendment to the license agreement, which would encumber the property and bind the Boyces, if they purchased the property. The trial court entered a summary judgment in favor of the Casseses on the fraud and suppression claims, holding (1) that upon the closing, all representations and negotiations between the parties merged into the deed and the deed became the sole memorial of any agreement made by the parties, and (2) that the Boyces' fraud and suppression claims were time-barred by § 6-2-38, Ala.Code 1975 (providing a two-year statute of limitations applicable to fraud actions) and by § 6-2-3, Ala.Code 1975, because the Boyces' did not assert those claims within two years of discovering the facts allegedly constituting the fraud. This Court has recognized that [a]bsent fraud or mistake, when a contract to sell or convey land is consummated by execution and delivery of a deed, that contract becomes `functus officio' and the deed becomes the sole memorial of the parties' agreement. Swanson v. Green, 572 So.2d 1246, 1248 (Ala.1990) (footnotes omitted). We agree with this principle, known as the merger doctrine. However, we need not apply it in this case because, as discussed below, the Boyces' misrepresentation and suppression claims are barred by the applicable statute of limitations and we therefore cannot reach the question whether there was fraud so as to negate the application of the merger doctrine. The Boyces' claims of fraudulent misrepresentation and fraudulent suppression are subject to a two-year statute of limitations. Ala.Code 1975, § 6-2-38( l ); Ex parte Seabol, 782 So.2d 212, 216 (Ala.2000). However, [t]hat statute of limitations is subject to the `saving clause' provided by § 6-2-3: `In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have two years within which to prosecute his action.' Seabol, 782 So.2d at 216. However, our analysis of this issue is also impacted by Ala.Code 1975, § 35-4-90(a), which provides: All conveyances of real property, deeds, mortgages, deeds of trust or instruments in the nature of mortgages to secure any debts are inoperative and void as to purchasers for a valuable consideration, mortgagees and judgment creditors without notice, unless the same have been recorded before the accrual of the right of such purchasers, mortgagees or judgment creditors. We have also recognized: Under Ala.Code 1975, § 35-4-90, the proper recordation of an instrument constitutes `conclusive notice to all the world of everything that appears from the face' of the instrument. Thus, purchasers of real estate are `presumed to have examined the title records and knowledge of the contents of those records is imputed [to them].' Haines v. Tonning, 579 So.2d 1308, 1310 (Ala.1991) (quoting Christopher v. Shockley, 199 Ala. 681, 682, 75 So. 158, 158 (1917), and Walker v. Wilson, 469 So.2d 580, 582 (Ala.1985)). It is undisputed that the Golf Club recorded the license agreement and the amendment to the license agreement on January 24, 1997, a few days before the Boyces acquired their interest in the property. Because the agreement was recorded at the time the Boyces obtained title to the property, they are charged with notice of the recorded agreement as of that time. This action was filed in April 2002, more than five years after the Boyces obtained title to the property and, more than five years after the Boyces are charged with notice of the encumbrance against their property. For this reason, the Boyces' claims of fraudulent misrepresentation and fraudulent suppression against the Casseses are time-barred. We next address the Boyces' claim that the Casseses conspired with the Golf Club to omit material facts from the public and, specifically from the [Boyces], by wrongfully withholding and not promptly recording the License and License Amendment to place prospective purchasers, like the [Boyces], on notice of any encumbrance on the property by Greystone, following notice of the sale. We have concluded that the Boyces' claims of fraudulent misrepresentation and fraudulent suppression are time-barred. For the same reasons, the Boyces' conspiracy claims against the Casseses are time-barred. See § 6-2-38, Ala.Code 1975 (two-year statute of limitations applicable to fraud and conspiracy actions); Kelly v. Alexander, 554 So.2d 343, 344 (Ala.1989) (Because the conspiracy to defraud claim is dependent upon the underlying fraud, the statute of limitations on that claim began to run at the same time as did the statute for the underlying fraud claim.), overruled on other grounds, Ford Motor Co. v. Neese, 572 So.2d 1255 (Ala.1990). We affirm the summary judgment on the conspiracy claim against the Casseses. We next address the Boyces' claims that the Casseses breached the warranty. Alabama Code 1975, § 35-4-271, provides: In all conveyances of estates in fee, the words `grant,' `bargain,' `sell' or either of them, must be construed, unless it otherwise clearly appears from the conveyance, [as] an express covenant to the grantee, his heirs and assigns, that the grantor was seised of an indefeasible estate in fee simple, free from incumbrances done or suffered by the grantor, except the rents and services that are reserved; and also for quiet enjoyment against the grantor, his heirs and assigns, unless limited by the express words of such conveyance; and the grantee, his heirs, personal representatives, and assigns may, in any action, assign breaches, as if such covenants were expressly inserted. The warranty deed by which the Casseses conveyed the property to the Boyces provided: We do, for ourselves and for our heirs, executors and administrators, covenant with said grantee, their heirs and assigns, that we are lawfully seized in fee simple of said premises; that they are free from all encumbrances, unless otherwise stated above; that we have a good right to sell and convey the same as aforesaid; that we will, and our heirs, executors and administrators shall, warrant and defend the same to the said grantee, their heirs and assigns forever, against the lawful claims of all persons. This deed was executed on January 28, 1997. It is undisputed that the warranty deed made no exception for or reference to the license agreement or to the amendment to the license agreement. Thus, the Boyces presented substantial evidence indicating that, at the time the Casseses conveyed the property to them, the Casseses were not lawfully seized in fee simple. . . . free from all encumbrances and the Casseses did not disclose in the deed the encumbrance created by the license agreement and the amendment to the license agreement. This evidence raises a genuine issue of material fact regarding the Boyces' claim that the Casseses breached the warranty in their deed. We conclude that the trial court's summary judgment for the Casseses on this claim was improper.