Property II, Pages 772–776

Frimberger v. Anzellotti

Appellate Court of Connecticut, 1991

Facts:

Defendant's brother DiLoreto, the predecessor in title, subdivided a parcel of land to build two houses. As part of this, he built a bulkhead next to an edge bordering a wetlands and filled that portion. He then built a house and quitclaim deeded it to brother, defendant. Defendant warranty deeded it to plaintiff, free and clear of all encumbrances, but subject to all building and zoning restrictions and restrictions of record.

Plaintiff engaged an engineering firm to repair the bulkhead and discovered that it was encroaching on the wetlands boundary, violating a statute. The state department of environmental protection suggested that plaintiff submit an application them demonstrating the necessity of maintaining the bulkhead, but plaintiff instead filed a lawsuit against defendant, claiming breach of the warranty against encumbrances.

Procedural History:

Trial court determined that the area had been filled without the necessary permits, that defendant had breached the warranty against encumbrances, and that defendant innocently misrepresented the condition of the property by allowing plaintiff to purchase the property in reliance on defendant's warranty against encumbrances. The court awarded plaintiff $47,792.60 in damages and costs.

Issue:

Does an alleged latent violation of a land use statute or regulation at the time of conveyance breach the grantor's covenant against encumbrances?

Rules:

  • LexisNexis IconWestLaw LogoGoogle Scholar LogoPage 773, Paragraph 3

    An encumbrance is defined as "every right to or interest in the land which may subsist in third persons, to the diminution of the value of the land, but consistent with the passing of the fee by the conveyance." All encumbrances may be classed as either

    1. a pecuniary charge against the premises, such as mortgages, judgment liens, tax liens, or assessments, or
    2. estates or interests in the property less than the fee, like leases, life estates or dower rights, or
    3. easements or servitudes on the land, such as rights of way, restrictive covenants and profits.
    It is important to note that the covenant against encumbrances operates in praesenti and cannot be breached unless the encumbrance existed at the time of the conveyance.
  • LexisNexis IconWestLaw LogoGoogle Scholar LogoPage 775, Paragraph 2

    [F]or a deed to be free of all encumbrances there must be marketable title that can be sold "at a fair price to a reasonable purchaser or mortgaged to a person of reasonable prudence as a security for the loan of money." To render a title unmarketable, the defect must present a real and substantial probability of litigation or loss at the time of the conveyance.

Reasoning:

  • Most states hold that a covenant against encumbrances cannot be predicated on the necessity to repair or alter the property to conform with land use regulations.

  • The DEP never actually took any action against plaintiff over the violation of the statute, despite plaintiff never submitting an application to them. Any damages plaintiff may have suffered were only speculative. The trial court based its damages on the anticipated costs of complying with a proposed application, but the evidence suggests that no litigation or loss was imminent.

  • Expanding the doctrine of encumbrances would create uncertainty in the law. Parties can protect themselves by including protective language in the contract and deed. Plaintiff was an attorney who knew of the wetlands restrictions. He could have protected himself by requiring a survey or provisions in the contract and deed.

Rule/Holding:

LexisNexis IconWestLaw LogoGoogle Scholar LogoPage 775, Paragraph 4

[T]he concept of encumbrances cannot be expanded to include latent conditions on property that are in violation of statutes or government regulations.

Judgment:

Reversed.