New Jersey Appellate Court Finds Settlement with Title Company Was Not Election of Remedies Preventing Property Owner from Suing Neighbor for Encroachments, Rejects Neighbor’s Adverse Possession Claim

The New Jersey Appellate Division recently held that a property owner’s $600 settlement with her title company did not bar her later action against her neighbor for the neighbor’s encroachments onto her properties, and further held that the neighbor did not adversely possess the disputed property.  See Leonard v. Pantich, 2020 WL 5049098 (N.J. Super. Ct. App. Div. Aug. 27, 2020).  This action concerns a property line dispute between two neighbors.  Plaintiff purchased her property in 2006, and obtained a survey that showed that defendant’s fence encroached on the rear of her property.  She later obtained a $600 settlement from her title insurance company for this encroachment.  In 2010, she sent defendant a letter asking defendant to remove his fence, but he refused.  In 2015, defendant “replenished” his stone driveway located near the front of the parties’ properties.  Although defendant claimed the location of the driveway did not move, plaintiff claimed the driveway was extended across the property line into her property.  In 2018, plaintiff brought this action for quiet title regarding both the fence and the driveway.  Defendant then filed a counterclaim alleging adverse possession or a prescriptive easement.  After a bench trial, the trial court issued a decision in favor of plaintiff.  It held that the fence encroached onto plaintiff’s property by under a foot and the driveway encroached by 3-4 feet, and that defendant had not adversely possessed the same.

On appeal, the Court affirmed.  First, it rejected defendant’s claim that the $600 payment to plaintiff from the title insurance company constituted an election of remedies that barred this claim.  The Court found that the $600 was a “nominal sum” that appeared to be only related to the fence encroachment and, more importantly, that the election of remedies doctrine “has long ago been ‘characterized [as] ‘a harsh and now largely obsolete rule’ and one ‘to be strictly confined within its reason and spirit.’’” Thus, “it would be unreasonable and contrary to the spirit of that equitable doctrine to transfer ownership of plaintiff's property to defendant under the circumstances presented.”  Second, the Court found that defendant’s use of the disputed property was not “adverse or hostile” due to the limited encroachment, and therefore could not form the basis of an adverse possession claim.  Plaintiff mowed the disputed area for a decade and informed defendant that his fence encroached on her property in 2010.  Moreover, the fence encroached by less than a foot, and “a presumption that plaintiff knew of the encroachment would have been improper, especially as defendant did not undertake ‘extensive improvements’ on the property.”  Accordingly, the Court affirmed the decision in plaintiff’s favor.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Anthony Lombardo at alombardo@riker.com.