Good Fences Make Good Neighbors: Real Estate Tales from the Courtroom

Neighbor Segal appealed to the Arizona Court of Appeals from the trial court's grant of summary judgment in favor of his Adjoining Neighbors in a boundary-by-acquiescence and adverse-possession action concerning a strip of land between the parties' properties.

Facts

In July 2006, Neighbor Segal built a block wall fence between his lot and the adjacent vacant lot, which was owned by the Adjoining Neighbors. The wall fence did not track the property line, but sat east of the recorded boundary line, leaving 440 square feet of Neighbor Segal’s property on the Adjoining Neighbor’s side of the wall (the “Disputed Area”). The Adjoining Neighbors assert that Neighbor Segal asked that they share in the cost of constructing the wall, which Neighbor Segal denied.

The Adjoining Neighbors regularly sprayed weeds and cleared debris from their lot as well as the Disputed Area. Neighbor Segal claims he performed similar maintenance on the Disputed Area during the same time.

In 2010, the Adjoining Neighbors began construction of their home on the lot and, in 2011, they built a permanent shed and drainage structure within the Disputed Area. The Adjoining Neighbors also enclosed their backyard with a “wing wall” fence attached to Neighbor Segal's wall. According to Neighbor Segal, he informed the Adjoining Neighbors in February 2011 that their construction encroached on his land, an assertion the Adjoining Neighbors disputed.  It was undisputed that during the construction of the Adjoining Neighbors' shed, Neighbor Segal complained to the city that the shed did not comply with the city's setback requirements and a city inspector found no violations.

In 2018, Neighbor Segal obtained a survey, which revealed that 440 square feet of his land was on the Adjoining Neighbors' side of the wall fence and included part of their shed and drainage structure.  The Adjoining Neighbors also obtained a survey that revealed the same results. 

Neighbor Segal filed a quiet-title action, and the Adjoining Neighbors counterclaimed, arguing they had obtained the legal right to the Disputed Area through adverse possession and/or boundary by acquiescence through their use of the Disputed Area for more than 10 years.

Both parties moved for summary judgment, and the trial court granted the Adjoining Neighbors' motion, finding they had acquired title by adverse possession and both parties had acquiesced for more than ten years to the establishment of the property line created by the wall fence that Neighbor Segal built. 

Neighbor Segal appealed the trial court’s decision to the Court of Appeals. This appeal followed. 

The Court of Appeals Decision

First, the Court of Appeals noted that Summary judgment is only appropriate when there is no genuine dispute as to any material fact and a party is entitled to judgment as a matter of law. When considering a Summary Judgment Motion the trial court may not weigh witness credibility, or quality of evidence, or “choose among competing or conflicting inferences.”

Boundary by Acquiescence

To establish a boundary by acquiescence, a party must prove “(1) occupation or possession of property up to a clearly defined line, (2) mutual acquiescence by the adjoining landowners in that line as the dividing line between their properties, and (3) continued acquiescence for a long period of time.”  The boundary in question must be visible, definite, and clearly marked, and the required time period for the parties' acquiescence is ten years. 

There was no dispute that the boundary in question was visible, definite, marked by the wall fence Neighbor Segal built in 2006 and that the Adjoining Neighbors occupied the Disputed Area up to Neighbor Segal's wall from 2010 to 2018.  What was in dispute was whether the Adjoining Neighbors occupied the Disputed Area before 2010, whether Neighbor Segal acquiesced that the wall he built was the boundary line, and whether such acquiescence continued for at least ten years.

Adverse Possession

To establish title by adverse possession, the party claiming title must prove an (1) actual or visible, (2) open and notorious appropriation of land, (3) under a claim of right (4) hostile to the claim of another that is (5) exclusive (6) continuous and (7) for a period of ten years.  Whether the elements of adverse possession have been satisfied is a question of fact based on the circumstances of the case. 

Again, the parties disagree as to whether the elements of adverse possession coincided prior to 2010. Neighbor Segal claimed: (i) the Adjoining Neighbors' occasional entry onto the Disputed Area was insufficient to satisfy the “appropriation” element of adverse possession; (ii) the Adjoining Neighbors did not visibly occupy Neighbor Segal's property in an open and notorious manner by maintaining the Disputed Area; (iii) the Adjoining Neighbors' did not have exclusive possession of the Disputed Area due to Neighbor Segal's access to it; and (iv) the Adjoining Neighbors did not occupy the Disputed Area under a hostile claim of right.

The Court’s Decision

The Court of Appeals reversed the trial court’s summary judgment and sent the case back to the trial court for findings of fact.  Whether the case went to trial or was settled by the Neighbors is unknown to this author. 

Case Lessons:

·          Boundary by acquiescence and adverse possession claims can be difficult and costly to prove.

·         If you encounter a boundary dispute or adverse possession claim, consult a real estate lawyer as soon as possible.

·         Don’t build a fence unless you are sure of the property boundaries – good fences make good neighbors. 

 

Segal v. Carstensen

2020 WL 5629766

THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.

No. 2 CA-CV 2019-0208

Filed September 21, 2020

 

K. Michelle Lind, Esq. is an attorney who currently serves Of Counsel to the Arizona REALTORS®.  She is also the author of the book - Arizona Real Estate: A Professional's Guide to Law and Practice (3rd Ed.) .  Watch for the Fourth Edition, which should be available soon. 

 For more real estate related articles, visit Michelle’s Blog at Arizona Real Estate – A Professional’s Guide to Law & Practice. (arizonarealestateprofessionalguide.blogspot.com)

This article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.  7/23/23

“Finders Keepers Losers Weepers?” - Real Estate Tales from the Courtroom

A buyer purchased a Paradise Valley home “as is” and while remodeling, $500,000 was found hidden in the walls. Who owns the money – the buyer, the seller, or the contractor that found the money? The Arizona Court of the Appeals was asked to answer this question.   

 The Facts:

The seller’s father lived in the home until he passed away and his daughter (the “seller”) was the personal representative of his estate. The seller knew from experience that her father had hidden gold, cash, and other valuables in unusual places in other homes. Over the course of seven years, the seller found stocks and bonds, as well as hundreds of military-style green ammunition cans hidden throughout the house, some of which contained gold or cash.

Seven years after her father’s death, the seller sold the home “as is” to the buyers. The buyers hired a contractor to remodel the home. Shortly after construction began, an employee of the contractor discovered two ammunition cans full of cash in the kitchen wall behind a wall mounted toaster oven, and two more cash-filled ammo cans inside the framing of an upstairs bathroom. The contractor did not disclose the found money to the buyers right away and hid the money. Eventually, the contractor told the buyers about the discovery and the police ultimately took control of the $500,000.   

The buyers sued the contractor for the money, the contractor filed a counterclaim for the money, and the seller filed a petition in probate court on behalf of the estate to recover the money. The two cases were consolidated.   The trial court ruled that the money belonged to the seller and the buyer appealed, arguing that the money was abandoned when the home was sold “as is.”  

 The Court’s Decision

The Court of Appeals stated that although school children like to say “finders keepers” a finder’s rights depend on how a court classifies the found property. Found property can be classified as: 

 

·         Mislaid: the owner intentionally places it in a certain place and later forgets about it.

·         Lost: the owner unintentionally parts with it through either carelessness or neglect.

·         Abandoned: it is thrown away or voluntarily and intentionally forsaken by its owner.   

·         Treasure trove: it is verifiably antiquated and concealed for so long that the owner is probably dead or unknown. 

Generally, a finder of lost, abandoned, or treasure trove property acquires a right to possess the property against the entire world, except the rightful owner.  A finder of mislaid property must turn the property over to the owner of the premises where the property was found and has a duty to safeguard the property for the true owner.

The Court quoted an American Law Reports article “Title to Unknown Valuables Secreted in Articles Sold”:

 

Where both buyer and seller were ignorant of the existence or presence of the concealed valuable, and the contract was not broad enough to indicate an intent to convey all the contents, known or unknown, the courts have generally held that as between the owner and purchaser, title to the hidden article did not pass by the sale.

 

Further, the Court noted that money is rarely, if ever, abandoned.  As a result, the Court of Appeals agreed with the trial court, found that the money was mislaid, and therefore, the money belonged to the seller. 

Case Lessons:

• “Finders” are not always “keepers” – even in an “as is” contract. 
• “Losers” are not always “weepers” – regardless of what the kids say.
• If you hide money in your home – make sure your Personal Representative knows where to find it. 

 

Spann v. Jennings, 229 Ariz. 584, 278 P.3d 1287 (App. 2012)

 

K. Michelle Lind, Esq. is an attorney who currently serves Of Counsel to the Arizona REALTORS®.  She is also the author of the book - Arizona Real Estate: A Professional's Guide to Law and Practice (3rd Ed.) .  Watch for the Fourth Edition, which should be available soon. 

 For more real estate related articles, visit Michelle’s Blog at Arizona Real Estate – A Professional’s Guide to Law & Practice. (arizonarealestateprofessionalguide.blogspot.com)

This article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.  7/5/23