This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
A nonprofit organization, Southwest Regional High School, Inc. (SWRHS), received a 52.8-acre property from the grantors under a deed containing a reversionary clause requiring the land to be used for educational facilities. SWRHS failed to meet the conditions of the deed and a subsequent settlement agreement, including constructing and operating a four-year high school and obtaining accreditation. The property was later transferred to a third party, and a dispute arose when a former SWRHS board member, who had received a quitclaim deed for part of the property, sought to quiet title (paras 3-8).
Procedural History
- District Court, March 1995: The Crowders and SWRHS entered into a settlement agreement resolving claims from a quiet title action. The agreement included specific conditions for the use of the property (para 5).
- District Court, January 2003: Dantonio filed a quiet title action for 12 acres of the property. The court initially ruled in favor of Dantonio, finding the reversionary condition terminated for the 12 acres (paras 8-9).
- District Court, January 2007: Upon reconsideration, the court reversed its earlier ruling, finding the reversionary condition applied to the entire 52.8 acres and quieted title in favor of Cervantes (para 11).
Parties' Submissions
- Appellant (Dantonio): Argued that the settlement agreement superseded the deed, no reversion was triggered, the agreement created a divisible contract, the doctrine of partial reversion applied, and equity should prevent forfeiture (para 12).
- Appellee (Cervantes): Contended that the settlement agreement did not create a divisible contract, the reversionary condition was triggered, and the doctrine of partial reversion was inapplicable (paras 10, 20).
Legal Issues
- Did the settlement agreement supersede the deed and alter the reversionary conditions?
- Was the settlement agreement divisible, allowing partial reversion?
- Did the doctrine of partial reversion apply to prevent forfeiture of part of the property?
- Should equity prevent the forfeiture of the 12 acres?
Disposition
- The Court of Appeals affirmed the district court’s decision, quieting title to the entire 52.8 acres in favor of Cervantes (para 40).
Reasons
Per Castillo J. (Sutin and Kennedy JJ. concurring):
Deed and Settlement Agreement: The settlement agreement superseded the deed only to the extent that it established new conditions for reversion. SWRHS failed to meet these conditions, including constructing a four-year high school and obtaining accreditation, triggering automatic reversion (paras 14-19).
Divisible Contract: The settlement agreement was not divisible. Its language required full compliance with all conditions, including constructing all four grades and obtaining accreditation, before any waiver of the reversionary clause could occur. Extrinsic evidence did not establish ambiguity or intent for divisibility (paras 20-31).
Partial Reversion: The doctrine of partial reversion was inapplicable because the reversionary condition was violated in its entirety, and no intent for partial reversion was expressed in the agreement. Unlike prior cases, no portion of the property was being used in compliance with the conditions (paras 32-37).
Equity: The district court did not abuse its discretion in rejecting equitable arguments. The settlement agreement explicitly provided for automatic reversion upon non-compliance, and equity could not override these clear terms (paras 38-39).