Holmes Development, LLC v. Cook
Supreme Court of Utah
48 P.3d 895 (2002)
Due to a defective quitclaim deed that misidentified the wrong entity as grantor, Cook Development (defendant) did not actually hold clean title to a 323-acre parcel when it sold both that parcel and a smaller one to Holmes Development (plaintiff) via warranty deed in May 1998. A related company later sold the same 323-acre parcel to Keystone Development, which sued to quiet title and recorded a lis pendens in November 1998 that blocked Holmes from selling lots during peak season, even though Keystone's claim was ultimately defeated. Holmes sued Cook for breach of the deed's title covenants, and the trial court granted Cook summary judgment, finding any breach cured once Keystone's claim failed.
Whether the grantor of a warranty deed breaches the covenants of seisin, right to convey, against encumbrances, warranty, and quiet enjoyment when the grantor did not actually hold clean title at the time of transfer, but a later-arising third-party claim challenging that title is ultimately defeated.