## Facts

- A divorce decree awarded the marital home to Sarah Satterfield subject to conditions: timely mortgage payments and residence within 50 miles of Salt Lake City until the youngest child turned 18; breach would cause title to revert to David Allen.
- A deed conveying the home to Satterfield included the same conditional reversion terms.
- While holding title and complying with the residency condition, Satterfield refinanced the property multiple times, increasing the encumbrances.
- In 1998, Satterfield sold the home to Thomas Hall, who took under record title and assumed the existing mortgages.
- In 1999, Satterfield moved out of Utah, violating the residency condition and triggering Allen’s reversionary interest.
- Allen sued to quiet title against Hall, asserting title reverted to him upon Satterfield’s move; Hall asserted good-faith purchaser/occupant status and sought equitable and statutory protection for mortgage payments and improvements.

## Issues

1. When a reversionary interest becomes possessory due to breach of a condition in a divorce decree and deed, does the reverting owner take title free of, or subject to, mortgages and other encumbrances placed on the property during the conditional owner’s valid ownership?
2. Does the Utah Occupying Claimants Act entitle a good-faith purchaser/occupant to reimbursement for mortgage-related expenditures and/or improvements, and what is the proper measure of recovery?

## Decision

- The Utah Supreme Court held Allen was entitled to title when the residency condition was breached.
- The court held Allen took the property subject to existing encumbrances; the intervening mortgages did not disappear upon reversion.
- The court held Hall qualified as a good-faith occupying claimant under the Utah Occupying Claimants Act and was entitled to reimbursement for the value of improvements.
- The court modified the lower court’s approach to reimbursement to conform to the statute and remanded for valuation consistent with the proper statutory measure.
- The disposition affirmed in part and modified in part.

## Legal Principles

- A conditional owner who holds valid present title may place enforceable encumbrances on the property; when a reversion later becomes possessory, the reverting owner generally takes the property burdened by existing liens.
- A reversionary interest triggered by breach of an express condition in a decree and deed restores title to the reversioner but does not automatically extinguish debts and mortgages that attached during the conditional owner’s estate.
- Under the Utah Occupying Claimants Act, a dispossessed good-faith occupant holding under color of title may recover compensation for improvements made in good faith.
- Compensation for improvements under the Act is based on the value added/attributable to the improvements at the time of recovery, not necessarily the occupant’s raw costs or all expenditures such as mortgage payments.

## Conclusion

The Utah Supreme Court recognized Allen’s reversionary title but ruled that he received the property subject to existing mortgages and that Hall, as a good-faith occupant under color of title, was entitled under the Utah Occupying Claimants Act to reimbursement measured by the value of his improvements, requiring further proceedings to apply the correct valuation standard.


Allen v. Hall, 148 P.3d 939 (Utah 2006)