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Casady v. Fehring: Licensee’s Knowledge Imputed to Client

A Missouri court has evaluated whether buyers could claim two additional acres included in the property description provided at closing but which had been previously conveyed by the prior owner.

In 1997, Linda and Craig Casady (“Casadys”) sold a house on a 26-acre property to Claudia Sue Jensen (“Jensen”).  In 2005, the Casadys approached Jensen about repurchasing two of the 26 acres.  A survey was completed, and the parties agreed to the purchase.  Following the closing, the documents showing the purchase were inadvertently recorded out of order by the local recorder of deeds.

In 2006, Jensen died and so her estate put the remaining 24 acres on the market by listing the property with Judith Taylor of Show-Me Real Estate (“Listing Broker”).  The Listing Broker knew that the two acres had previously been sold to the Casadys, and so the real estate sign on the property stated “APPROX. 24 acres”.  The online listing also stated that the property was 24 acres.  In addition, the stakes marking the boundaries of the two acres placed on the property during the 2005 survey were still visible.

David and Julie Fehring (“Buyers”) became interested in the property though their representative, Mike West of Red Carpet Real Estate (“Buyer’s Representative”).   After several offers, the parties reached an agreement to purchase the property.  The agreement stated that the property was 24 acres and gave the Buyers the right to survey the property.  The Buyers did not survey the property.  The Buyer’s Representative also received a map of the property which indicated the two acres owned by the Casadys.

The deed conveyed to the Buyers contained the legal description for the entire 26 acres.  Jensen’s estate admitted that this was a mistake.  When the Casadys discovered that the Buyers thought they owned their two acres, the Casadys brought a quiet title lawsuit against the Buyers over the two acres.  The court ruled in favor of the Casadys, and the Buyers appealed.

The Missouri Court of Appeals, Southern District, affirmed the rulings of the trial court.  The Buyers claimed that they were unaware of the prior sale and the deed that they received conveyed all 26 acres to them.  The Casadys asserted that the Buyers had sufficient notice that the property they were purchasing was only 24 acres.

The court ruled that the Buyers had notice of the Casadys’ purchase of the two acres and so denied their attempt to claim the property.  First, the record of title established that the Casadys had purchased the two acres, even though the recorder of deeds recorded the documents in a “seemingly illogical” order.  A purchaser of real estate is imputed constructive notice of all recorded instruments, and so the Buyers had constructive notice of the Casadys’ 2005 purchase.

The court also found that the Buyer’s Representative had a map clearly indicating the 24 acres that the Buyers purchased and he also had contacted the Casadys about the boundaries.  Therefore, the court imputed the Buyer’s Representative’s knowledge of the boundaries to the Buyers.  Because of the knowledge imputed to the Buyers about the Casadys’ purchase of the two acres, the court affirmed the trial court ruling.

Casady v. Fehring, 360 S.W.3d 904 (Mo. Ct. App. 2012).