Arizona Court of Appeals Division One Holds that the Statute of Limitations in Quiet Title Actions under Section 12-821 Does Not Accrue “At Least as Long as the Owner Maintains Undisturbed Possession of the Property.”

In 2001, Jerry Cook asked the town of Pinetop-Lakeside, Arizona (the “Town”) to abandon a parcel of land to him.  The Town agreed and passed a resolution abandoning the property to Cook because the property was “no longer necessary for public use as a roadway or right-of-way.”  The resolution was properly recorded with the Navajo County Recorder.

In 2007, Cook’s neighbor filed a notice of claim and complaint against the Town arguing that the 2001 abandonment landlocked his property in violation of Arizona law.  He argued he was not aware of the abandonment until he began plans to build a home on the lot many years later.  After finding that the 2001 abandonment did in fact landlock the neighbor’s land, the Town agreed to rescind the abandonment

In 2009, Cook brought an action to quiet title against the Town and the property company that owned his neighbor’s lot.  The Town filed for summary judgment, arguing that Cook’s claim was barred by the one-year statute of limitations under A.R.S. 12-821.  The trial court agreed and granted summary judgment.

The Court of Appeals reversed and remanded for further proceedings.  The court found that Section 12-821’s one-year statute of limitations from the date an action accrues was unambiguous and did apply in Cook’s quiet title action against the Town.  The court rejected the Town’s argument, however, that the action accrued in 2007 when the Town rescinded the abandonment.  Rather, the court held that the Town’s 2007 rescission created a cloud on Cook’s title, and that in such situations, the action does not accrue for statute of limitation purposes, “at least as long as the owner maintains undisturbed possession of the property.”  Since there was no evidence that anyone besides Cook had used the property, the court found that Cook’s quiet title action was not barred by the statute of limitations.

Judge Gemill authored the opinion in which Judge Thompson and Kessler concurred.