August 21, 2019

Colorado Court of Appeals: District Court Did Not Completely Discharge Mandate in Taylor Ranch Case Because Identification Process Was Not Comprehensive

The Colorado Court of Appeals issued its opinion in Cielo Vista Ranch I, LLC v. Alire on Thursday, November 15, 2018.

Real Property—Public Lands.

Fifteen years ago, the Colorado Supreme Court remanded this case to the district court with instructions to “identify all landowners who have access rights to the Taylor Ranch.” In 2004, the district court began identifying and decreeing access rights for landowners in the San Luis Valley whose land was settled by 1869. From 2004 until 2010, the district court relied on the best available evidence to decree access rights for individual landowners without requiring any landowner to come forward to assert a claim (the opt-out process). After 2010, the district court decreed access rights for only those landowners who came forward to assert claims (the opt-in process). In October 2016, the trial court issued a final order that certified all prior orders, adjudicating 26 access rights for landowners as final and appealable pursuant to C.R.C.P. 54(b). Remaining landowner claimants were not foreclosed from coming forward in the future.

Appellants in this case are CVR Properties, Ltd., Jaroso Creek Ranch, LLC, and Western Properties Investors LLC, the owners of Cielo Vista Ranch and other properties that were once known as the Taylor Ranch (the Ranch) (collectively, Ranch Owner). Appellees are landowners in Costilla County whose rights to access the Ranch to graze livestock and gather firewood and timber were decreed through the remand proceedings.

On appeal, Ranch Owner challenged the trial court’s implementation of the supreme court’s mandate on remand. The opt-out proceedings on remand from 2004 through 2010 were largely consistent with the mandate. But as to the opt-in process from 2010 through 2016, the district court did not completely discharge the mandate because that portion of the identification process could have been, but was not, comprehensive. The trial court mistakenly concluded that it was bound by the law of the case doctrine to implement an opt-in process during the last phase on remand.

The October 2016 order was reversed to the extent it requires any remaining landowners entitled to access to the Ranch to come forward. The case was remanded for the trial court to identify all remaining owners of benefited lands and adjudicate their rights. In all other respects the order was affirmed.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Lack of Economic Marketability Does Not Equate to Unmarketable Title

The Tenth Circuit Court of Appeals issued its opinion in Fidelity National Title Insurance Co. v. Woody Creek Ventures, LLC on Tuesday, July 26, 2016.

Woody Creek acquired two parcels of land in Pitkin County and purchased two title insurance policies from Fidelity, insuring, among other things, access and marketability of title. The two parcels were separated by a tract of land owned by the Bureau of Land Management, but Woody Creek assumed it could access the more remote parcel via a roadway crossing the BLM’s tract. It subdivided the parcels and sought prospective buyers. When a prospective buyer expressed concern about access to the remote lot, Woody Creek discovered that it had no legal right of access.

Woody Creek submitted a claim to Fidelity under the title insurance policies, and Fidelity retained counsel on Woody Creek’s behalf. Counsel ultimately negotiated the purchase of a 30-year revocable right-of-way grant from the BLM to allow Woody Creek access to the remote parcel. Woody Creek maintained that it suffered a covered loss because the lack of permanent access significantly diminished the value of the remote parcel. Fidelity filed an action for declaratory judgment that Woody Creek was not entitled to coverage for its alleged losses because the right-of-way cured the access issue. Woody Creek counterclaimed for declaratory judgment on the existence of coverage, breach of contract, and bad faith breach of insurance contract. The parties filed cross-motions for partial summary judgment on the coverage issues.

After a hearing, the district court granted Fidelity’s motion and denied Woody Creek’s. The court concluded that the 30-year right-of-way fell within the plain meaning of “access” and left the question of whether Fidelity may be required to pay for future loss of access for another day. The court concluded that the possibility of future litigation did not render the title unmarketable, and rejected Woody Creek’s bad faith claims as a matter of law. Woody Creek appealed.

The Tenth Circuit first addressed Woody Creek’s argument that Fidelity’s purchase of a 30-year right-of-way did not cure the access issue because the right-of-way was revocable and temporary. Fidelity argued that although the title insurance policy guaranteed access, it did not guarantee unrestricted, unregulated, or permanent access. The Tenth Circuit construed the phrase “right of access” and determined that permanent, unrestricted access was not contemplated by the phrase. The Tenth Circuit decided that the Colorado Supreme Court would have construed the phrase “right of access” to include the 30-year right-of-way obtained by Fidelity.

The Tenth Circuit next considered whether the lack of permanent access supported Woody Creek’s claim for unmarketability of title, and concluded it did not. Woody Creek cited a treatise on title insurance law for the proposition that lack of access makes title unmarketable. Fidelity disagreed and suggested that Colorado case law supported its position that even complete lack of access does not render title unmarketable. The Tenth Circuit evaluated the cases and affirmed the district court’s decision, noting the distinction between economic marketability and marketability of title. The Tenth Circuit noted that a parcel of land could be worth no money but have clear title.

The Tenth Circuit affirmed the district court.