Quiet title; Goodspeed v Nichols; The unclean-hands doctrine

The court affirmed the trial court’s order quieting title to the property to plaintiff/counterdefendant, the City. Defendant/Cross-Plaintiff-Appellant, Moby Dick, argued that title should be quieted in its favor because the City conveyed the property to defendant-B&C by delivering a facially valid quitclaim deed. The parties disagreed “about the City’s intent in delivering the deed to B&C and dispute various aspects of the record in that regard. They disagree[d], for instance, about whether the quitclaim deed was marked ‘COPY,’ and whether the City assessed taxes against B&C related to the property.” However, it was undisputed “that B&C never paid any of the consideration owed in exchange for conveyance of the property, contrary to the plain language of the quitclaim deed.” The court agreed “with the trial court that this undisputed fact is dispositive in this case and entitles to the City to have title quieted in its favor.” The parties’ intent was “embodied in the express language of the quitclaim deed—the City would convey the property to B&C in exchange for $250,000. Because the consideration was never paid, delivery of the quitclaim deed was ineffective to convey title to the property. While delivery of the deed raises a presumption of intent to pass title, that presumption ‘is not conclusive and may be rebutted by the evidence,’ as it was here by the undisputed facts of the case.” Moby Dick contended “that, while the City may have a breach-of-contract claim against B&C for its failure to pay the consideration for the deed, that failure is immaterial to the effectiveness of the conveyance.” Moby Dick relied on Goodspeed. “Unlike this case, Goodspeed did not involve a complete failure of consideration.” Rather, the court noted “in Goodspeed, the defendant paid part of the consideration owed and the parties’ dispute centered around the terms of their tangential agreement regarding the condition of the property. Thus, contrary to Moby Dick’s assertion, Goodspeed does not support its contention that the failure of consideration is irrelevant to whether the City validly conveyed title to B&C and that the City’s only recourse is damages claim against B&C for breach of contract.” Moby Dick also argued that the City was “not entitled to judgment in its favor under the unclean-hands doctrine.” The court held that at “most, the evidence may show that the City acted negligently with respect to the quitclaim deed, but ‘[m]ere negligence . . . do[es] not constitute facts giving rise to the application of the doctrine of unclean hands.’”