The Clock Doesn’t Tick-Tock for Owners in Possession

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The Arizona Court of Appeals recent decision in Cook v. Town of Pinetop-Lakeside, 661 Ariz. Adv. Rep. 31 (App, May 28, 2013) reiterated its forty-three year old holding in City of Tucson v. Morgan, 13 Ariz. App. 193, 195, 475 P.2d 285, 287 (App. 1970) and held that “the statute of limitations does not run against a plaintiff in possession who brings a quiet title action purely to remove a cloud on the title to his property.”

Clock

 In 2001, Jerry Cook asked the town of Pinetop-Lakeside (the “Town”) to abandon a public right-of-way to him because the right-of-way was no longer needed for public use.  The Town council agreed and passed a resolution abandoning the right-of-way to Cook.  In 2007, Cook’s neighbor, Cletis Heffel, filed a complaint with the Town because his own property purportedly became landlocked by the Town’s abandonment of the public right-of-way.  The Town held two public meetings to discuss how to resolve the issue; Cook attended each meeting.  The Town ultimately passed a resolution rescinding the 2001 abandonment of the public right-of-way with Cook in the audience.  In October 2007, the Town recorded its resolution with the Navajo County Recorder’s Office. 

 Cook waited until February 2009 to bring his quiet title action.  The trial court, relying upon A.R.S. § 12-821 (“All action against any public entity or public employee shall be brought within one year after the cause of action accrues and not afterward.”), granted the Town’s summary judgment motion on statute of limitations grounds.  The trial court determined that Cook had actual knowledge of the cloud on his title because he attended the Town council meeting where the abandonment was rescinded.  Because Cook’s lawsuit was filed more than one year after the Town council meeting, the trial court determined that the statute of limitations had run on Cook’s quiet title action.

 On appeal, however, Cook’s actual knowledge of the cloud on his title was immaterial to the Court’s decision because the statute of limitations did not begin to run against Cook because he was not seeking money damages – only clear title.  In Arizona, absent a claim for money damages, “a cause of action to quiet title for the removal of the cloud on title is a continuous one and never barred by limitations when the cloud exists.”  Morgan, 13 Ariz. App. at 195, 475 P.2d at 287.  In Cook, there was no evidence in the record that anyone besides Cook used the disputed property and, thus, Cook had not suffered any damages that would otherwise trigger the statute of limitations to begin to run.   

 After Cook, owners in possession can take some comfort in knowing their ability to bring a quiet title action will not lapse even if they have actual knowledge of a dispute to their right to title.

- See more at: http://www.swlaw.com/blog/real-estate-litigation/2013/06/12/the-clock-doesnt-tick-tock-for-owners-in-possession/#sthash.NKu82LzB.9ZkFc6PN.dpuf

The Arizona Court of Appeals recent decision in Cook v. Town of Pinetop-Lakeside, 661 Ariz. Adv. Rep. 31 (App, May 28, Clock2013) reiterated its forty-three year old holding in City of Tucson v. Morgan, 13 Ariz. App. 193, 195, 475 P.2d 285, 287 (App. 1970) and held that “the statute of limitations does not run against a plaintiff in possession who brings a quiet title action purely to remove a cloud on the title to his property.”

In 2001, Jerry Cook asked the town of Pinetop-Lakeside (the “Town”) to abandon a public right-of-way to him because the right-of-way was no longer needed for public use.  The Town council agreed and passed a resolution abandoning the right-of-way to Cook.  In 2007, Cook’s neighbor, Cletis Heffel, filed a complaint with the Town because his own property purportedly became landlocked by the Town’s abandonment of the public right-of-way.  The Town held two public meetings to discuss how to resolve the issue; Cook attended each meeting.  The Town ultimately passed a resolution rescinding the 2001 abandonment of the public right-of-way with Cook in the audience.  In October 2007, the Town recorded its resolution with the Navajo County Recorder’s Office. 

Cook waited until February 2009 to bring his quiet title action.  The trial court, relying upon A.R.S. § 12-821 (“All action against any public entity or public employee shall be brought within one year after the cause of action accrues and not afterward.”), granted the Town’s summary judgment motion on statute of limitations grounds.  The trial court determined that Cook had actual knowledge of the cloud on his title because he attended the Town council meeting where the abandonment was rescinded.  Because Cook’s lawsuit was filed more than one year after the Town council meeting, the trial court determined that the statute of limitations had run on Cook’s quiet title action.

On appeal, however, Cook’s actual knowledge of the cloud on his title was immaterial to the Court’s decision because the statute of limitations did not begin to run against Cook because he was not seeking money damages – only clear title.  In Arizona, absent a claim for money damages, “a cause of action to quiet title for the removal of the cloud on title is a continuous one and never barred by limitations when the cloud exists.”  Morgan, 13 Ariz. App. at 195, 475 P.2d at 287.  In Cook, there was no evidence in the record that anyone besides Cook used the disputed property and, thus, Cook had not suffered any damages that would otherwise trigger the statute of limitations to begin to run.   

After Cook, owners in possession can take some comfort in knowing their ability to bring a quiet title action will not lapse even if they have actual knowledge of a dispute to their right to title.