Frimberger v. Anzellotti, Appellate Court of CT (1991)
Author: Bram

Parties: PL -- Appellee - purchased the land and discovered the tidal wetlands violation

       DF -- appellant - got the land from brother's via quit claim deed, and conveyed it to P by warranty deed

Cause of action/remedy sought: The following is a legal action for damages for breach of warranty against encumbrances and innocent misrepresentation.

Procedural History: Lower court found for PL for diminutive damages and costs to correct the violation, $47,000.

Facts: In 1978, DF's brother subdivided property into 2, intending to build homes on each. Subject property abuts a tidal march land and was subject to statutory regulations. Brother built a bulkhead and filled the parcel adjacent to the wet lands, then built the home. In 2/84 brother conveyed to DF by quit claim deed. In 12/85 DF conveyed to PL by warranty deed.

In 1986, PL decided to repair the bulkhead (partition/dividing wall) and filled area, and hired an engineer, who ordered a survey of the tidal wetlands property. DEP officials and engineers found a violation, and ordered a second survey. Second survey found that the bulkhead and possibly the corner of the house violated the statute, and directed PL to submit an application to DEP demonstrating the necessity of the bulkhead.

Issue(s): Under CT property law, does the latent violation of a land use statute or regulation, existing on the land at the time of conveyance, constitute an encumbrance such that it breaches the grantee's covenant against encumbrances?

Holding: No, this statute violation is not a violation of the covenant. Judgment reversed, and remanded with instructions to enter judgment for D on those issues.

Court's Rationale/Reasoning:  Latent violations of a restrictive land use statute of ordinances a case of first impressions in this jurisdiction; however, the weight of case law states such a violation does not affect marketability (marketable title is title which 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) and should not rise to the level of an encumbrance.   For the title to be unmarketable, the defect must present a real and substantial probability of litigation or loss at the time of the conveyance.  Also, no encumbrance, no misrepresentation (and in this case DF made no representation at all) was made.  In other words, because the warranty of a covenant against encumbrances was not violated, no misrepresentation was made. 

Looked to Fahmie case, in which a nine foot sewer pipe was used against code. Court held that to expand the concept of an encumbrance to include statute violations existing at the time of conveyance would create uncertainty and confusion in the law of conveyancing and title insurance, because neither a title search or inspection of the property would disclose the violation. DF did not know of the violation. Similar facts to this case.

DEP advised PL of the violations in 1986, and suggested PL file an application. PL has not. DEP has never tried to compel compliance or require PL to abate the violation or restore the wetlands. Hence any damages are speculative. PL initiated the DEP action. Prior to it, no litigation or loss was imminent. Even though DEP could still impose fines or restrict land use until it complies, this restriction still would not be an encumbrance. 

PL could have required an A-2 survey prior to closing, or placed language into the deed to protect himself. He didn't - what a schmuck - he was a lawyer and a waterfront land developer.   He knew of the wetlands requirement.

Rule: Latent violations of a restrictive land use statute of ordinances a case of first impressions in this jurisdiction; however, the weight of case law states such a violation does not affect marketability (marketable title is title which 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) and should not rise to the level of an encumbrance.   For the title to be unmarketable, the defect must present a real and substantial probability of litigation or loss at the time of the conveyance.  Also, no encumbrance, no misrepresentation (and in this case DF made no representation at all) was made.

Did court avoid issues?: No.

Dicta: Recapping of the Fahmie case.  How PL could have protected himself.

Possible effects: Lawyers would be prudent to include language in deeds protecting purchasers from statute and ordinance violations