Madrid v. Spears

Spears (plaintiff) brought suit to quiet title to a one-half interest in a tract of real property. Spears alleged that a deed purportedly conveying her interest in the property had been forged. Madrid (defendant) had occupied the property and made improvements upon the property over a four year period. Spears conceded that Madrid was entitled to compensation for the value of improvements, but asserted that any such compensation should be offset by profits earned from Madrid’s use of the wrongfully possessed property. The trial court concluded that Madrid was entitled to credit for one half the value of the improvements. The trial court did not award an offset for profits arising from Madrid’s use of the land because it had no evidence of the difference in rental value between the land with improvements and the land in its unimproved state. The court partitioned the property and placed a lien against Spears’ parcel in the amount awarded to Madrid as credit for improvements. Madrid appealed and argued that the appropriate measure of compensation for improvements should not be based on the actual value of the improvements, but on the increase in value to the property as a whole resulting from the improvements. Spears also appealed and argued that the trial court erred in failing to award her an offset for profits arising from Madrid’s use of the property.