## Facts

- Elizabeth E. Foley conveyed a 37-acre parcel in King County, Washington, to George E. and Elizabeth A. Smith by statutory warranty deed containing covenants of warranty and quiet enjoyment.
- Before conveying to the Smiths, Foley had agreed to sell the same parcel to a prior purchaser.
- The prior purchaser obtained a decree of specific performance requiring conveyance of the parcel and divesting Foley and the Smiths of any interest in the property.
- In the specific performance litigation, the Smiths were determined not to be bona fide purchasers as against the prior purchaser.
- Foley returned the Smiths’ down payment, but the parties disputed entitlement to remaining proceeds paid in connection with the ultimate disposition of the property.
- Foley sued to determine interests in the proceeds; the Smiths counterclaimed for breach of the deed’s covenants based on their loss of the land under the decree.

## Issues

1. Whether a decree of specific performance in favor of a prior purchaser constitutes actual or constructive eviction under a paramount title sufficient to breach covenants of warranty and quiet enjoyment.
2. Whether a grantee’s lack of bona fide purchaser status bars recovery for breach of the covenants.
3. When the statute of limitations accrues for breach of warranty and quiet enjoyment covenants: at conveyance or at eviction.
4. Whether a post-death breach claim asserted against an estate is subject to Washington’s nonclaim statute (RCW 11.40.010).
5. Whether recoverable damages for breach include interest on consideration paid and reasonable attorneys’ fees incurred in good-faith efforts to defend title.

## Decision

- The Court of Appeals affirmed the judgment for the Smiths on their counterclaim and against Foley on her claim to the disputed proceeds.
- The court held that the specific performance decree constituted a constructive eviction under a paramount title, triggering breach of the covenants.
- The court held the Smiths could recover on the covenants despite not being bona fide purchasers.
- The court held the limitations period did not begin until eviction and the counterclaim was timely.
- The court held the nonclaim statute did not apply because the claim arose after death and was asserted against the estate.
- The court approved damages including interest on the consideration paid and reasonable attorneys’ fees incurred in good-faith title defense.

## Legal Principles

- Covenants of warranty and quiet enjoyment are prospective and are breached only upon actual or constructive eviction under a paramount title existing at the time of conveyance.
- A decree that judicially compels conveyance to a superior claimant and divests the grantee’s interest constitutes constructive eviction for purposes of these covenants.
- These covenants protect against known and unknown title defects; lack of bona fide purchaser status does not bar recovery for breach.
- The statute of limitations for breach of warranty/quiet enjoyment begins to run upon eviction, not upon delivery of the deed.
- A claim arising after a decedent’s death and asserted against the estate is not a “claim against the deceased” subject to RCW 11.40.010.
- Damages for breach may include interest on the consideration paid and reasonable attorneys’ fees incurred in good-faith efforts to defend title.

## Conclusion

The court affirmed liability for breach of warranty and quiet enjoyment where a prior purchaser’s specific performance decree operated as constructive eviction, held the action accrued at eviction (not conveyance), rejected a bona fide purchaser bar, found the estate nonclaim statute inapplicable to a post-death breach, and approved damages including interest and reasonable title-defense attorneys’ fees.


Foley v. Smith, 539 P.2d 874 (Wash. Ct. App. 1975)