Court Opinion

ID: 9548098
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:57:22.343795+00
Date Added: 2024-06-11T15:18:27.574229
License: Public Domain

BUTTLER, J.,
dissenting.
Because I agree with the trial court that the counterclaim in the earlier action alleged title by adverse possession only, against which the title insurer was not obligated to defend, I dissent.
Defendants contend that paragraph II of the Nydams’ counterclaim in the prior action states a cause of action for adverse possession, which is excluded from coverage because it is a claim “not shown by the public records.” Plaintiffs, on the other hand, emphasize the Nydams’ allegation that they possessed the property “pursuant to deed,” which plaintiffs claim asserts a defect in their record title and is a defect against which defendants insured. That phrase is included in the paragraph of the counterclaim that clearly alleges the elements of adverse possession. It is so included, I believe, because the Nydams were claiming adverse possession under color of title, or “paper title,” about which the court in Swift v. Mulkey, 17 Or 532, 535, 21 P 871 (1889), said:
“* * * The distinction between entering into possession under paper title, or color of title, and mere claim of ownership, is, that under a color of title any adverse possession extends to the whole tract described in the paper title, while under a mere claim of ownership, adverse possession only extends to that part actually occupied. * * *”
One may claim title to property through adverse possession under claim of right without its being under color of title or pursuant to a deed. If there is no instrument describing the metes and bounds of the property claimed, the adverse possessor can only gain title to that portion which is actually occupied. Parker v. Kelsey, 82 Or 334, 161 P 694 (1916); Note, “Adverse Possession — Color of Title — Origin of Doctrine,” 22 Or L Rev 188 (1943). The Nydams attached to their counterclaim a metes and bounds description of the property they claimed the right to possess.
The majority states:
“* * * The allegations concerning adverse possession would be sufficient without the language about the deed. In the absence of the language about the deed, there would be no duty to defend, because that duty only arises when there is
*545some claim shown of record. The allegations of the counterclaim were broad enough to allow proof by the Nydams that they were not trespassers, because either they owned the land by adverse possession or they held the land pursuant to a deed. It would also permit evidence that the deed was recorded. If that were the evidence, defendants’ policy would clearly provide coverage.” 73 Or App at 543. (Emphasis supplied.)
The majority thus concedes that the duty to defend arises only when there is some claim shown of record. The Nydams did not allege that the deed under which they claimed was of record or, more importantly, that it was recorded prior to plaintiffs’ deed. That is the fundamental problem with plaintiffs’ argument. The majority attempts to cure that defect by stating that the allegation would permit evidence that the deed was recorded. Although that is true, even if the allegation had been that the Nydams were in possession “under claim of right,” and had omitted “and pursuant to a deed,” evidence of a recorded deed would have been admissible. Accordingly, given the majority’s analysis, the pleading could be reasonably interpreted to include an incident within the coverage of the policy, and defendants would have had a duty to defend. Yet the majority concedes that if the allegation had omitted the deed language, there would have been no duty to defend.
In my opinion, the counterclaim did not allege a defect in plaintiffs’ record title, which defendants insured. The title policy excluded “claims which are not shown by the public records.” I conclude that the Nydams’ counterclaim unambiguously alleged a claim of title by adverse possession under color of title, a claim that defendants did not insure against and were not required to defend. The motion to dismiss was properly granted; accordingly, I would affirm.
Rossman and Newman, JJ., join in this dissent.