Pennington v. Flaherty

Pennington v. Flaherty, 2013 MT 160 (June 18, 2013) (5-0) (Morris, J.)

Issue: Whether the district court properly held that the subdivision plat and recorded restrictions were the only restrictions on the use of Pennington’s property.

Short Answer: Yes.

Affirmed

Facts: Bruce Nelson subdivided property on Gibson Reservoir in the early 1970s. He filed a subdivision play in 1973, showing about 44 tracts. The only restriction on the plat was that no property owner could install a sanitary facility on a lot until the county sanitarian approved the facility.

Nelson filed a separate document entitled “Restrictions” a year later. The document provided that tracts 16 and 17, now owned by Pennington, would be combined into one, and that the installation of a drainfield would require approval from the county sanitarian prior to construction on the combined parcel.

Flaherty claims he bought tract 18 from Nelson in June 1973, ten days after Nelson filed the plat. He did not record the deed until January 1975. His deed states that he took title subject to restrictions recorded June 12, 1974.

Flaherty alleges that Nelson guaranteed, orally and in writing, that he would not sell adjoining tracts 16 and 17. In 1977, Flaherty filed a “Declaration of Interest” with the county clerk and recorder, which was Flaherty’s affidavit attesting that Nelson had guaranteed that tracts 16 and 17 would not be sold, and that this guarantee was integral to Flaherty’s contract with Nelson. Flaherty attached a sales brochure from Nelson, providing that “only alternate sites [are] being offered so that buyers will have the utmost privacy.” The plat on the brochure does not match the official plat approved by the county.

Nelson sold tracts 16 and 17 in 2005 to the Carlborns. The deed does not reference any negative easement or servitude in favor of Flaherty. Pennington bought tracts 16 and 17 from Carlborns in 2008. His deed also did not reference any negative easement or servitude in favor of Flaherty. Pennington had actual knowledge of Flaherty’s declaration, and signed an addendum to the buy/sell acknowledging Flaherty’s claims. Pennington accepted title without any warranty.

Procedural Posture & Holding: Pennington filed a quiet title action. Flaherty moved for summary judgment, and the district court denied the motion, holding Flaherty’s declaration was hearsay and no exception applied, as was Flaherty’s assertion that Nelson assured him tracts 16 and 17 would never be developed.

Pennington then moved for summary judgment, and the court granted her motion. Flaherty appeals, and the Supreme Court affirms.

Reasoning: An implied restriction can be enforced as an equitable servitude. Implied negative easements are to be considered with “extreme caution,” as they deprive people of the use of their property. ¶ 21. Flaherty cannot allege that any recorded document misled him. Nor has he presented evidence that he paid a premium for a buffer zone. The brochure does not specify that Pennington’s property would not be developed. Moreover, discrepancies between the brochure and the recorded plat raise doubts as to the brochure’s authenticity.

M.R.Evid. 801 would bar admission of Nelson’s alleged oral statements, and no hearsay exception applies. Nor can Flaherty establish equitable estoppel.