Arizona Court of Appeals Division Two Holds that the Statute of Limitations Applies to Quiet Title Actions Where the Parties Contest Possession.

Michael Schugg owned a failing dairy farm completely surrounded by the Gila River Indian Reservation.  The farm eventually went into bankruptcy.  Access to the farm was along a road owned by the Arizona Board of Regents (ABOR) as part of a University of Arizona experimental farm.  Schugg claimed to have an implied easement over the road to access his own dairy farm.

In early 2008 ABOR erected a gate over the road, blocking Shugg’s access, though he continued to use the road intermittently.  In September 2008 Schugg sent a letter demanding that ABOR execute a quitclaim deed granting an easement, which ABOR declined to do.  Schugg filed a quiet title action in December 2009.  On ABOR’s motion, the superior court dismissed the suit for falling outside the one-year statute of limitations in A.R.S. § 12-821 for actions against the State.  Schugg timely appealed.

The Arizona Court of Appeals affirmed the dismissal.  The general rule that statutes of limitations do not apply to quiet title actions is valid only when the party seeking to quiet title enjoys undisturbed possession of the property in question.  When the suit is brought to resolve adverse claims for possession, the action is more akin to a declaratory judgment than a true quiet title action, and therefore ordinary statutes of limitations apply.  Here the adverse claim accrued no later than September 2008 when Schugg demanded a quitclaim deed from ABOR, and his suit was untimely.

The Court also rejected Schugg’s argument that ABOR’s decision to block the implied easement constitutes a continuing trespass which resets the statute of limitations.  In order to claim that ABOR trespassed on the easement Schugg must first show that he has a property interest, which he could not do because the statute of limitations had passed.  Schugg also argued that the very existence of a statute of limitations on claims against the State reinstates sovereign immunity for the State; the Court rejected this argument because Schugg could have brought a claim against the State if he had done so in a timely manner.

Judge Miller authored the opinion; Judges Vásquez and Espinosa concurred.