Beth Marie Riddle, Julia A. Riddle, and Beth Marie Riddle Representing the Interest of Joseph H. Riddle, Sr., Deceased v. Richard J. Udouj, as Special Administrator for the Estate of Olivia K. Udouj, Deceased and Michael A. Udouj and Richard J. Udouj, Trustees of the Olivia K. Udouj Trust Dated February 18, 1983

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SUPREME COURT OF ARKANSAS  No.  07­538  BETH  MARIE  RIDDLE,  JULIA  A.  RIDDLE,  AND  BETH  MARIE  RIDDLE  REPRESENTING  THE  INTEREST  OF  JOSEPH H. RIDDLE, SR., DECEASED,  APPELLANTS,  Opinion Delivered  11­8­07  APPEAL FROM THE CIRCUIT COURT  OF  SEBASTIAN  COUNTY,  NO.  CV­  2 0 0 5 ­ 5 7 ,   H O N .   J A M E S   R .  MARSCHEWSKI, JUDGE,  VS.  RICHARD  J.  UDOUJ,  AS  SPECIAL  ADMINISTRATOR FOR THE ESTATE OF  OLIVIA  K.  UDOUJ,  DECEASED,  AND  MICHAEL A. UDOUJ AND RICHARD J.  UDOUJ, TRUSTEES OF THE OLIVIA K.  UDOUJ TRUST DATED FEBRUARY 18,  1983,  APPELLEES,  AFFIRMED.  ROBERT L. BROWN, Associate Justice  Appellants Beth Marie Riddle, et al. (“the Riddles”) appeal the grant of summary  judgment in favor of appellees Richard J. Udouj, et al. (“the Udoujes”) and assert that the  court erred in deciding the Riddles’ claims regarding breach of the warranties of title and  quiet enjoyment and constructive fraud based on the running of the respective statutes of  limitations.  We affirm the circuit court.  On May 30, 1996, the Riddles purchased a home in a residential neighborhood from  the Olivia K. Udouj Trust.  As part of that conveyance, Olivia Udouj provided a property disclosure, which stated in relevant part that: (1) there were no “features of the Property  shared in common with adjoining landowners, such as walls, fences and driveways, the use  or  responsibility  for  which  may  have  an  effect  on  the  property”;  and  (2)  there  were  no  “encroachments, easements, leases, liens [sic] adverse possession claims or similar matters  that may affect the title to the Property.”  Prior to completing the purchase,  the Riddles  obtained a survey of the property, which indicated that the property described by the legal  description extended several feet beyond the fences that lay to the north and the east of the  property.  These fences had been built in the 1950s by Olivia Udouj and her husband.  Sometime after purchasing the property, the Riddles began altering the landscaping  to the east of the fence, leading the property owners to the east, Conrad F. Kaelin and Ava  Paulette  Kaelin  (“the  Kaelins”),  to  hire  an  attorney,  who  sent  the  Riddles  a  letter  dated  May 26, 1998, demanding that the Riddles not remove the existing fence or disturb  any  landscaping to the east of the fence.  In July of 2000, the Riddles made additional changes  to the landscaping east of the fence, removing trees, bushes and tulip plants and prompting  1  the Kaelins’ attorney to send the Riddles another letter.  After a December 2000 ice storm,  the Riddles had tree limbs removed from trees located to the north of the fence.  th  On June 18  , 2001, the Riddles filed suit against the Kaelins in circuit court, seeking  to quiet title to the disputed property east of the fence as per  their survey.  The Kaelins 1  On November 17, 2000, the Riddles recorded a deed conveying the property to their  daughter, Julia Riddle.  ­2­  07­538  counterclaimed, asserting that the fence existing at the time the Riddles acquired the property  described the boundary line by acquiescence.  In 2002, the Riddles removed the northern  fence and began constructing a new fence four feet to the north at what they alleged to be the  true property line.  This prompted the property owners to the north of the Riddles, Cecil  Knight and Robbie Mae Knight (“the Knights”), to move to intervene in the lawsuit and seek  to quiet title to the property to the north of the original fence.  On October 15, 2002, the  circuit court entered judgment in which it concluded that the old fence lines established by  acquiescence the boundaries between the Riddles’ land and the Knights’ and Kaelins’ land.  On January 13, 2005, the Riddles filed suit against the Udoujes and alleged breach  of contract through breach of warranty of title, breach of warranty of quiet enjoyment, and  breach of warranty to defend title.  The Riddles also alleged constructive fraud by Olivia  2  Udouj based on the representations she made in the property disclosure.  On February 16, 2006, the Udoujes moved for summary judgment and argued that the  Riddles’ claims were barred by the statute of limitations.  The Riddles responded that the  statute of limitations for their claims of constructive fraud and breach of the warranties of  title and quiet enjoyment did not begin to run until the entry of the circuit court’s October  15, 2002 order, and, thus, their complaint was timely.  Following a hearing on the motion, 2  Joseph Riddle, Sr. and Olivia Udouj died in early 2005. On May 13, 2005, the circuit  court entered an order substituting Beth Riddle as the party representing Joseph Riddle’s  interest  and  James  Shoffey  as  a  special  administrator  representing  the  interest  of  Olivia  Udouj.  The role of special administrator is currently filled by Richard J. Udouj.  ­3­  07­538  the circuit court found that the existence of hedges and landscaping on the disputed property  to the north and east of the fence, when coupled with the Kaelins’ May 26, 1998 letter to the  Riddles, triggered the running of the statute of limitations for both the breach of warranty and  constructive  fraud  claims.  An  order  to  this  effect  was  entered  on  April  24,  2006.    The  Riddles appealed.  On May 9, 2007, the Arkansas Court of Appeals affirmed the circuit  court’s order.  See Riddle v. Udouj, 99 Ark. App. 10, 16­17,  ___ S.W.3d ___ (2007).  On  May 25, 2007, this court granted the Riddles’ petition for review.  After granting a petition for review, this court considers the case as if it had originally  been filed in this court.  Van  Wagner  v. Wal­Mart Stores, Inc., 368 Ark. 606, 608, ___  S.W.3d ___, ___ (2007).  The standard used by this court when reviewing a circuit court’s  grant of summary judgment is well established:  Summary judgment is to be granted by a trial court when it is clear that there  are no genuine issues of material fact to be litigated, and the party is entitled  to judgment as a matter of law.  Once the moving party has established a prima  facie entitlement to summary judgment, the opposing party must meet proof  with  proof  and  demonstrate  the  existence  of  a  material  issue  of  fact.    On  appellate review, we determine if summary judgment was appropriate based  on whether the evidentiary items presented by the moving party in support of  its motion leave a material fact unanswered.  This court views the evidence in  a  light  most  favorable  to  the  party  against  whom  the  motion  was  filed,  resolving all doubts and inferences against the moving party.  Our review is  not  limited  to  the  pleadings,  as  we  also  focus  on  the  affidavits  and  other  documents filed by the parties.  After reviewing undisputed facts, summary  judgment should be denied if, under the evidence, reasonable persons might  reach different conclusions from those undisputed facts.  Lewis v. Mid­Century Insurance Company, 362 Ark. 591, 594, 210 S.W.3d 113, 115 (2005)  (citations omitted). ­4­  07­538  The Riddles first assert that the statute of limitations did not begin to run on their  breach­of­the­warranties­of­title and quiet­enjoyment claims until the court entered an order  in October 2002, holding that the disputed property did not belong to the Riddles.  It was  only at that time, they argue, they were evicted from the disputed property.  Until that time,  they contend, they continued to use and enjoy the land.  The Riddles claim, in addition, that  their  knowledge  that  their  neighbors  disputed  their  title  to  the  land  was  insufficient  to  constitute eviction and was merely notice of a claim of paramount title.  At the very least,  they maintain, there was a disputed issue of fact regarding the date of eviction, which renders  summary judgment inappropriate.  The Udoujes concede that in some cases an eviction is effected by the entry of a  judgment.  They contend, however, that a judgment was not needed to evict the Riddles in  the  case  at  hand.    On  the  contrary,  the  Udoujes  assert  that  the  Riddles  were  never  in  possession of the disputed land and were constructively evicted on the date the property was  conveyed  to  them  in  1996,  which  triggered  the  statute  of  limitations.    This  constructive  eviction, the Udoujes assert, was effected by the encroaching fence lines, which were visible  and obvious.  The Udoujes also point out that the Riddles knew from a survey that the fences  were inside the boundaries described in their deed.  If these facts alone are insufficient to evict the Riddles constructively, the Udoujes  argue that they should be considered in conjunction with the letter the Kaelins’ attorney sent  to the Riddles in 1998, which directed them to cease all activities east of the original fence. ­5­  07­538  They further contend that the hostile assertion of title contained in the letter, when combined  with  the  visible  encroachments,  constituted  a  constructive  eviction.    According  to  the  Udoujes, this constructive eviction  was not overcome by the limited use of the disputed  property that the Riddles continued to have.  As a final point, the Udoujes urge that the issue of whether the Riddles had possession  of  the  property  was  conclusively  decided  when  the  circuit  court  found  in  2002  that  the  boundary  lines  of  the  property  had  been  established  at  the  original  fence  lines  by  acquiescence.  They argue that, as a result, the Riddles are barred by issue preclusion from  relitigating the boundary­line issue.  The statute of limitations for breach of a warranty is five years.  Ark. Code Ann. §16­  56­115 (Repl. 2005).  It is well established that the mere existence of superior title, whether  or  not  the  grantee  has  notice  of  its  existence,  is  insufficient  to  constitute  breach  of  a  warranty.  Hamilton  v.  Farmer,  173  Ark.  341,  344­45,  292  S.W.  683,  684­85  (1927).  Rather, a cause of action for breach of a warranty accrues and the  statute of limitations  begins to run only when the grantee is evicted or constructively evicted from the conveyed  property.  Thompson v. Dildy, 227 Ark. 648, 651, 300 S.W.2d 270, 272 (1957) (“With some  exceptions,  the  rule  is  that  an  action  for  damages  on  a  covenant  of  warranty  cannot  be  maintained where there has been no eviction.”); Hamilton, 173 Ark. at 344­45, 292 S.W. at  684­85 (“[A]n oustanding paramount title is not an eviction and does not of itself constitute ­6­  07­538  a breach of the warranty....  [T]he existence of [] paramount title itself would not constitute  an eviction nor entitle the appellant to bring suit against the grantors.”).  Eviction  occurs  when  a  person  is  dispossessed  by  process  of  law.    Black’s  Law  Dictionary 594 (8th ed. 2004).  Constructive eviction, on the other hand, occurs when a  purchaser is unable “to obtain possession because of a paramount outstanding title.”  Id. at  594.  Therefore,  the  question  in  the  case  at  hand  concerns  whether  the  Riddles  were  constructively evicted from the disputed property at some time before the 2002 order was  entered.  Neither the bench ruling in the instant case nor the subsequent order of the circuit  court contains an explicit finding that the Riddles were constructively evicted at the time of  conveyance.  The  court  noted  that  the  existing  landscaping  “wouldn’t  necessarily  have  triggered the Buyer’s response to clarify that issue.”  The circuit court did, however, go on  to note that the existing landscaping, when combined with the cease and desist letter sent by  the Kaelins, was sufficient to put the Riddles on notice of a problem with their title.  As an initial matter, we conclude that the circuit court’s reasoning is flawed.  The  Kaelins’ letter could only have put the Riddles on notice of a competing claim to the land.  It could not effect an eviction if the Riddles were currently in possession of the property.  This court’s case law is clear that notice of a claim is not the standard for commencing the  running of the statute of limitations in a breach­of­warranty action.  Elliott v. Elliott, 252  Ark. 966, 972, 482 S.W.2d 123, 127 (1972) (analyzing Texas law and noting the distinction ­7­  07­538  between notice of a pending suit and constructive eviction).  Nonetheless, this court can  affirm a circuit court that has reached the correct conclusion, albeit for the wrong reason.  Middleton v. Lockhart, 355 Ark. 434, 439, 139 S.W.3d 500, 503 (2003).  This court has examined the issue of when a covenant of warranty is breached by a  constructive eviction on several occasions.  In Smiley v. Thomas, we held that the ownership  of  a  one­half  undivided  oil  and  gas  interest  by  a  third  party  at  the  time  property  was  conveyed to a grantee did not amount to an immediate breach of the grantor’s warranty.  220  Ark. 116, 121, 246 S.W.2d 419, 421 (1952).  Instead, this court found that “[t]here had been  no  constructive  eviction,  in  effect,  until  the  present  suit  was  filed  in  December,  1950,  wherein [grantor] was a party and the court held...that [a third party] owned the 1/2 mineral  interest in the land involved here and that the covenant of warranty in the above deed had  3  been breached.”  Id.  Accordingly, the cause of action for breach of warranty did not accrue  nor the statute of limitations begin to run until that time.  Id.  Where, however, there is a visible, physical encroachment on the complainant’s land,  a constructive eviction may occur long before a court finds that title is held by a third party.  In Timmons v. City of Morrilton, the grantee of a piece of property sued the grantor, claiming  that  “obstacles  and  obstructions”  that  the  grantor  had  erected  before  the  conveyance  “prevented [grantee] from full possession of the property described in the deed.”  227 Ark. 3  Though it couches its holding in terms of a constructive eviction, the Smiley court  appears to have analyzed the issue using the definition for an actual eviction.  ­8­  07­538  421, 422, 299 S.W.2d 647, 648 (1957).  This court held that, “[w]hen the land conveyed is  at that time in possession of a stranger, the covenant is broken the date the deed is made, and  limitations  commence  immediately.”  Id.  at  423,  299  S.W.2d  at  649.    This  court  noted  that“[a]ny obstruction or encroachments involving the property [the grantor] conveyed to [the  grantee] existed prior to and at the time of the delivery of the deed and were visible and  obvious, so there was a constructive eviction the day of the deed.”  Id. at 422, 299 S.W.2d  at  648.  We  concluded  that  the  statute  of  limitations  began  to  run  immediately  upon  conveyance.  Id. at 423, 299 S.W.2d at 649.  In still another case,  Van Bibber v. Hardy, this court found that a property owner  could  be  evicted  by  the  presence  of  a  tenant  on  the  property  with  a  superior  right  to  possession.  215 Ark. 111, 118, 219 S.W.2d 435, 439 (1949).  A court order confirming the  tenant’s  superior  possessory  right  was  not  required  for  a  cause  of  action  for  breach  of  warranty to accrue.  Id.  Likewise, in Bosnick v. Hill, this court noted that where a third  party had fenced in a portion of the conveyed land and run cattle on it, the grantee never  obtained  possession  of  the  disputed  property,  and  the  covenant  of  seisin  was  breached  4 immediately upon conveyance.  292 Ark. 505, 508­09, 731 S.W.2d 204, 206­07 (1987).  4  We  note  that  a  covenant  of  warranty  such  as  we  have  in  the  instant  case  and  a  covenant of seisin are not one and the same.  Black’s Law Dictionary 393 (8th ed. 2004).  In  the  case  at  hand,  the  Riddles  have  not  asserted  a  breach  of  the  covenant  of  seisin.  Nonetheless, the Bosnick court’s discussion is applicable to this because both breach of the  covenant of seisin and breach of a covenant of warranty by constructive eviction are decided  on the basis of who has possession.  ­9­  07­538  Turning to the situation in the instant case, it is clear to this court from our case law  that physical encroachments may result in a constructive eviction.  For example, where a  home  or  other  building  encroaches  into  a  neighbor’s  yard,  the  record  owner  has  been  dispossessed of that portion of the yard.  See Nunley v. Orsburn, 312 Ark. 147, 150, 847  S.W.2d  702,  704­05  (1993)  (holding  that  construction  of  a  storage  shed  constituted  possession sufficient to establish a boundary by acquiescence).  Likewise, if a person builds  a fence or wall completely surrounding his or her home and in so doing encloses a portion  of their neighbor’s yard, the record owner has been dispossessed.  See Bosnick, 292 Ark. at  508­09, 731 S.W.2d at 206­07.  Such an encroachment need not completely foreclose the  possibility of physical entry in order to result in constructive eviction.  See, e.g., id.  In  Bosnick, there was no indication that the fence involved was unscalable.  Id.  The Riddles claim that the visible, physical encroachments onto the disputed property  were not sufficient to prevent their possession of that property.  We disagree.  Not only were  there visible fences establishing the boundary, but the adjacent property owners, the Kaelins  and the Knights, were using the disputed property as their own on the date of conveyance.  The maintenance of shrubs and other landscaping is the normal use of a residential yard, and  it is to this use that the Kaelins and Knights were putting the disputed property at the time  of the conveyance.  The Riddles undoubtedly made attempts to regain possession of the  disputed property by the legal process and by entering their neighbors’ yards for landscaping  activities.  None  of  these  attempts,  however,  change  the  fact  that,  as  of  the  date  of  the ­10­  07­538  conveyance,  the  disputed  property  was  possessed  by  third  parties,  the  Riddles  were  constructively evicted, and the warranties of title and quiet enjoyment were breached.  We further underscore the fact that in 2002, the circuit court found that a boundary  by acquiescence had been established by the existing fence.  That precise issue cannot now  be relitigated, as it is an issue that has been decided.  Riverdale Dev., LLC v. Ruffin Bldg.  Sys. Inc., 356 Ark. 90, 96, 146 S.W.3d 852, 855 (2004).  We affirm the circuit court and its  order of summary judgment based on the fact that a constructive eviction occurred due to the  breach of the respective warranties as of the date of conveyance in 1996 and the limitations  period had expired when the Riddles’ complaint against the Udoujes was filed in 2005.  Our  holding of constructive eviction is based on the fact that at the time of the 1996 conveyance,  the existing fences and shrubbery dispossessed the Riddles of part of the land conveyed to  them.  The Riddles next claim that when Olivia Udouj signed the owner property disclosure,  which asserted that no fences were shared in common with adjoining landowners and that  there  were  no  encroachments  that  might  affect  the  title  to  the  property,  she  committed  constructive fraud.  The statue of limitations for this fraud, they argue, was tolled until they  discovered or should have discovered the fraud.  The Riddles further assert that this did not  occur until the circuit court ruled in 2002 that the disputed property did not belong to the  Riddles,  because  up  until  that  time,  the  Riddles  believed  that  their  title  to  the  disputed ­11­  07­538  property  was  good.    To  hold  otherwise,  they  contend,  would  require  landowners  with  disputed title to sue prior landowners before it is clear that an adverse claim will succeed.  The statute of limitations for a constructive fraud claim is three years.  Ark. Code  Ann. §16­56­105 (Repl. 2005).  More than three years have elapsed since the commission  of the alleged fraud.  Therefore, the burden is on the Riddles to show that the statute of  limitations was tolled.  Scollard v. Scollard, 329 Ark. 83, 87, 947 S.W.2d 345, 347 (1997).  Tolling occurs when the person alleged to have committed the fraud has committed  a “positive act of fraud, something so furtively planned and secretly executed as to keep the  plaintiff’s  cause  of  action  concealed,  or  perpetrated  in  a  way  that  it  conceals  itself.”  Hampton v. Taylor, 318 Ark. 771, 778, 887 S.W.2d 535, 539 (1994).  It is a fraud that a  plaintiff, by reasonable diligence, could not have detected or had reasonable knowledge.  Id.  The Riddles, however, have failed to produce any evidence that Olivia Udouj engaged  in any act designed to conceal her alleged misrepresentation.  On the contrary, the Riddles  were aware of all material facts surrounding the alleged fraud, including the fact that the  existing  fences  were  inside  the  property  line  described  by  the  survey,  before  taking  possession of the land.  We hold that the Riddles have failed to meet their burden of showing  that the statute of limitations was tolled, and we further hold that the circuit court correctly  concluded that the statute of limitations on the fraudulent concealment claim had expired.  Affirmed. ­12­  07­538 

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