Unspecified v. Unspecified
25 Conn. App. 401, 594 A. 2d 1029 (1991)
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Rule of Law:
A latent violation of a land use regulation, unknown to the seller and not subject to any official enforcement action at the time of conveyance, does not constitute an encumbrance and therefore does not breach the covenant against encumbrances in a warranty deed.
Facts:
- In 1978, Paul DiLoreto, the defendant's predecessor in title, subdivided a property abutting a tidal marshland.
- DiLoreto constructed a bulkhead and filled a portion of the property adjacent to the wetlands without obtaining the required state permits from the Department of Environmental Protection (DEP), creating a statutory violation.
- In 1984, DiLoreto transferred the property to the defendant, Anzellotti, who was unaware of the wetlands violation.
- On December 31, 1985, Anzellotti sold the property to the plaintiff, Frimberger, using a warranty deed that stated the property was free and clear of all encumbrances.
- In 1986, while preparing to perform repairs, Frimberger hired an engineering firm, contacted the DEP, and discovered that the bulkhead and filled area were in violation of state tidal wetlands regulations.
- The DEP confirmed the violation in a letter to Frimberger and suggested he file an application to correct it, but did not issue any order or commence any formal enforcement action to compel compliance.
Procedural Posture:
- Frimberger (plaintiff) filed a lawsuit against Anzellotti (defendant) in the trial court, alleging breach of the warranty against encumbrances and innocent misrepresentation.
- The trial court found in favor of Frimberger on both claims.
- The trial court awarded Frimberger damages and costs totaling $47,792.60.
- Anzellotti (appellant) appealed the trial court's judgment to the Appellate Court of Connecticut.
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Issue:
Does a latent violation of a state land use statute, for which no official enforcement action has been taken, constitute an encumbrance that breaches the warranty deed's covenant against encumbrances?
Opinions:
Majority - Lavery, J.
No, a latent violation of a state land use statute does not constitute an encumbrance. The covenant against encumbrances is not breached unless the encumbrance existed at the time of the conveyance. The court defines an encumbrance as a right or interest in the land held by a third person, such as a mortgage, lien, easement, or restrictive covenant. A latent violation of a government regulation does not fit this definition. The court, adopting the reasoning from the New Jersey case Fahmie v. Wulster, held that expanding the definition of 'encumbrance' to include such violations would create significant uncertainty in conveyancing and title insurance, as these violations are not discoverable through a title search or physical inspection. To render a title unmarketable, a defect must present a real and substantial probability of litigation, which did not exist here as the DEP had taken no official action. The court concluded that parties can and should protect themselves from such risks through specific provisions in their sale contracts. Since no encumbrance existed, the warranty was not breached, and consequently, there was no innocent misrepresentation, as the warranty was the only representation made.
Analysis:
This decision aligns Connecticut with the majority of jurisdictions by narrowing the scope of the covenant against encumbrances. It establishes that latent, un-enforced violations of public land use regulations are not title defects. This ruling places a greater burden of due diligence on buyers to investigate a property's physical compliance with regulations, beyond a standard title search. It prioritizes stability and certainty in real estate transactions by refusing to expand deed warranties to cover risks that sellers may be unaware of and that buyers can contractually protect themselves against.
