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On Your Mark, Get Set, Go: Court of Appeals Decision Creates Race to the Courthouse in Actions to Quiet Title Involving Municipalities

fosterswift.com | July 31, 2014

By Anne M. Seurynck

In a decision that could lead to increased litigation against municipalities involving claims for adverse possession and acquiescence, the Michigan Court of Appeals recently held that a property owner is not statutorily barred from bringing such actions against municipalities as long as the property owner is the first to file suit. In other words, if the property owner sues the municipality to quiet title, the property owner’s action may proceed. If the municipality sues the property owner to quiet title, the landowner is barred by statute from asserting its own claim(s) to the property.

In Waisanen v Superior Township, a property owner filed a quiet title action against Superior Township under theories of adverse possession and acquiescence. The municipality counter-claimed. Adverse possession is a legal doctrine that provides that a person in possession of land owned by someone else may acquire valid title to it, as long as certain requirements are met, and the adverse possessor is in possession for a sufficient period of time. Acquiescence is a similar doctrine related to the boundary lines of real property. The biggest distinction between the two doctrines is that in the case of adverse possession, the taking of the land must be “hostile” to the title owner’s interest, while in acquiescence cases neither party to the dispute intends to take property from the other, but there is a mutual mistake as to the location of the actual boundary line.

The dispute in Waisanen came to light after a survey conducted by the municipality in 2008 revealed that the property owner’s break wall and home addition, in place for over 25 years, encroached on a lake access road dedicated to public use. The trial court ruled in favor of the plaintiff on both the adverse possession and acquiescence claims, and quieted title in favor of the property owner. The township appealed.

On appeal, the defendant-municipality argued that MCL 600.5821(2) barred plaintiff’s claims. MCL 600.5821(2) provides that “Actions brought by any municipal corporations for the recovery of the possession of any public highway, street, alley, or any other public ground are not subject to the periods of limitations.”

In this case, the municipality did not bring the action against the property owner. Rather, it filed a counter-claim. In ruling for the plaintiff-property owner, the Court of Appeals found this fact – i.e., that the plaintiff filed suit first - dispositive. It stated that “MCL 600.5821(2) does not provide protection for a municipal corporation which has merely counterclaimed for possession in an existing action, rather than bringing an action of its own.”

The Court of Appeals acknowledged that its ruling could create a “race to the courthouse” scenario, with private property owners and municipalities each being incentivized to be the first to bring suit. But it further noted that it was up to the legislature “to fix such an arguably anomalous result.” In the meantime, municipalities should take stock of whether any private party is occupying or encroaching on public land and should consider filing an action to quiet title or risk losing the property.

 

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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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