B. Recording of Drainage System Order and the Marketable Title Act B. Recording of Drainage System Order and the Marketable Title Act

B. Recording of Drainage System Order and the Marketable Title Act

A drainage proceeding is one “in rem,” and the order establishing the drainage system has the same final and binding force as a “judgment in rem.”¹⁶² After the drainage system is ordered, the lands affected by the drainage system have a new legal status. The benefit provided by the drainage system becomes a property right that runs with and is binding upon the land, even when ownership of the land transfers.¹⁶³

Nothing presently found in Minnesota Statutes requires the recording of orders that establish or modify the establishment of drainage systems; rather, the requirement is that all orders related to the drainage system be filed with the county auditor of the county having primary responsibility for administration of the drainage system or the secretary of the watershed district administering the drainage system.¹⁶⁴ Limiting the filing requirement to the county auditor or watershed district secretary may cause considerable confusion throughout the State for property buyers who are unfamiliar with agricultural practices or unaware of Minnesota’s laws regarding drainage systems. This confusion may lead to obstruction of open ditches, the construction of structures on top of tile system alignments, and other actions detrimental to the efficient function of drainage systems.

While no court has specifically addressed a challenge to the continued existence of property interests in unrecorded drainage systems, the recording of drainage systems is a responsible action by the drainage authority given a developing body of statutory and case law which threatens the validity of other types of unrecorded property interests. This process assists in eliminating future confusion and protects the historical rights of the benefited landowners in drainage systems within the county or watershed district. The recording process serves as constructive notice to all owners of property and to the public of the existence of the benefited landowner’s interest in the drainage systems on their property.

The Marketable Title Act provides that, unless an interest in real estate is preserved by filing a sworn notice within 40 years after the creation of the interest, that interest cannot be asserted against a claim of title based upon a source of title that has been of record for at least 40 years.¹⁶⁵

One exception to the Marketable Title Act is if the party claiming the interest is in possession of the land.¹⁶⁶ Minnesota Title Standard No. 61 discusses the degree of possession required under the Marketable Title Act as follows: “The owner of rights under a party wall agreement, right-of-way, utility easement or other easement manifested by actual use or occupancy consistent with the nature of the easement created is considered to be in ‘possession’ of the servient estate.” This statement was cited by the Minnesota Court of Appeals in Lindbergh v. Fasching. The Court held: “Whether an easement holder’s use and occupancy of an easement rises to the level of possession required by the Marketable Title Act depends on the nature of the easement and whether it’s use gave adequate notice of its existence and put the prudent person on inquiry.”¹⁶⁷

While no court has addressed the application of the Marketable Title Act to the context of drainage systems, providing constructive notice through recording may be important in light of the Minnesota Supreme Court’s holding in Sterling Township v. Griffin, a case addressing the application of the Marketable Title Act in the context of unrecorded township road orders which, like drainage system establishment orders, were required to be filed with the county auditor. In Sterling Township v. Griffin, the Supreme Court held that filing a township road order only with the county auditor and not with the county recorder means that the township has not complied with the Marketable Title Act and is presumed to have abandoned the road.¹⁶⁸ The Court reasoned, “it has long been held that the County Auditor’s records do not constitute notice of an interest in land.” The Court went on to find that the Township had not properly maintained the road for many years, so it could not be said that the Township was in possession of the road to escape the Marketable Title Act.

For long neglected ditches or for buried tile mains, the concept of possession sufficient to put an owner on inquiry notice is troubling. An argument can be made that periodic assessment for general maintenance activities, combined with ongoing use of the ditch or tile for agricultural drainage, could be argued as sufficient possession to overcome the Marketable Title Act’s presumption of abandonment. Maintained open ditches and drainage systems for which ongoing maintenance and maintenance expenditures are obvious, sufficient proof of possession is not as much of an issue. In either case, it would be reasonable and responsible action by a drainage authority to take steps to ensure that interests in drainage systems are properly recorded upon properties burdened by the drainage system in order to eliminate any risk of loss under the Marketable Title Act.

There is no specific process in Minnesota Statutes for recording orders establishing or modifying drainage systems. In the absence of a statutory process, the procedure adopted and followed should provide adequate due process protections to the owners of property affected by the recording. Procedures in Minnesota Statutes related to the recording of township roadway systems have been upheld by the Minnesota Courts as providing sufficient due process protections. Therefore, this proposed recording procedure is analogous to that required for recording township roadways.

RECOMMENDED CHECKLIST FOR RECORDING DRAINAGE SYSTEM RIGHT-OF-WAY

Prior to initiating the proceedings, the drainage authority staff should gather the following documents to assist the drainage authority engineer and the drainage authority attorney in preparing for the recording process:

• Final viewers’ report and any amended viewers’ reports;
  
• Engineer’s final reports;
  
• Order establishing the drainage system;
  
• Any supplemental orders establishing the drainage system;
  
• Additional lateral establishments or modifications;
  
• Any partial abandonments.
  

Based on a review of the record documents gathered by the drainage authority staff, the drainage authority engineer should prepare:

• Official watershed maps depicting the location of the open ditch and subsurface drain tile systems claimed by the drainage authority;
  
• A written description of the drainage system as it exists on the ground.
  

The map should be of such a scale and contain sufficient information in order to readily identify the property over which a drainage system passes. At a minimum, it would have to include: a legend in order to differentiate whether or not the drainage system was open ditch or tile, along with section, township, and range identifications; the locations of municipal boundaries; and, an administrative section to include information regarding the hearings upon which the map would be adopted and locations for signatures and attestations by the Chair of the Board and Auditor or Secretary.

Once the watershed map and legal description of the drainage system location are gathered, the drainage authority may initiate the proceedings by passing a resolution of intent to hold a public hearing to consider the recording of a drainage system or systems by adopting an official map. The resolution should incorporate the map depicting the location of the drainage system and the written description of the drainage system as it exists on the ground.

A sample Resolution of Intent is found here: Template B.

The drainage authority would give notice of the hearing by publication and personal mail to those owners of properties affected by the drainage system at least 30 days before the hearing. A sample Notice of Public Hearing is found here: Template C. During the public hearing, the drainage authority would receive testimony of persons interested and make any amendments to the proposed map. Upon resolution of the drainage authority, the drainage authority could adopt the map and direct the recording of individual interests onto the property records of all properties burdened by the system. During the recording process, the drainage authority would have to specifically identify any parcel of property affected in the proceedings which has undergone Torrens registration. For those properties, the drainage authority would have to give the recorder special instructions to add the interest to the Certificate of Title under the exception in Minn. Stat. § 508.25 for public conveyances. To support the recording procedure, and to provide sufficient evidence to justify the claim of interest in the drainage system sought to be recorded, the drainage authority would have to develop a record of proceedings containing, among other things: the order establishing the drainage system; any amendments or modifications to the order establishing the drainage system; a brief detail of evidence of “possession” to include a maintenance or assessment history for the drainage system; statements from the auditors and/or inspectors regarding work performed on the drainage systems; and summaries of survey data supporting the locations of the drainage systems as indicated on the official map. Sample affidavits for the County Auditor and County Engineer are found here respectively: Template D-1: Affidavit of Auditor and Template D-2: Affidavit of Engineer.

It would be beneficial to use the benefits and damages roll created during the most recent redetermination of benefits and damages (or at establishment if the benefits have never been redetermined) to aid the county recorder in identifying each parcel that is contained within the system and against which the drainage system should be recorded. A signed copy of the final resolution adopting the map and legal description of the drainage system, along with a signed copy of the map and the legal description of the easement, should be recorded together.

FOOTNOTES

¹⁶² See Lupkes v. Town of Clifton, 196 N.W. 666, 668 (Minn. 1924).
¹⁶³ See Lupkes v. Town of Clifton, 196 N.W. 666, 668 (Minn. 1924).
¹⁶⁴ Minn. Stat. § 103E.101, subd. 3 (2014).
¹⁶⁵ Minn. Stat. § 541.023 (2015); Hersh Props., LLC v. McDonald’s Corp., 588 N.W.2d 728, 734–35 (Minn. 1999).
¹⁶⁶ Minn. Stat. § 541.023, subd. 6 (2015).
¹⁶⁷ 667 N.W.2d 481, 488 (Minn. Ct. App. 2015).
¹⁶⁸ 244 N.W.2d 129 (Minn. 1976).