Haik v. Sandy City
Supreme Court of Utah
254 P.3d 171 (Utah 2011)
Sandy City (defendant) held an unrecorded Agreement of Sale for a water right dating to the 1970s but failed to record its deed for 27 years, even after recording the Agreement itself. Meanwhile, the water right's appurtenant land, Lot 31, changed hands multiple times without any reservation of the water right, eventually reaching the Haik parties (plaintiffs), who researched title back to the 1980s, found nothing amiss, and recorded their deed to the water right before Sandy City ever recorded its own. Sandy City later challenged the Haiks' interest, and the Haik parties sued to quiet title; the district court granted them summary judgment.
Whether a subsequent purchaser who has constructive record notice of an earlier claim to title can nonetheless take title in good faith and prevail over the earlier claimant by recording first.