Opinion
NO. 2011-CA-000733-MR
02-14-2014
DEAN S. LUNDERT APPELLANT v. NICHOLAS R. DAVIS APPELLEE
BRIEFS FOR APPELLANT: Mark E. Edison Shepherdsville, Kentucky BRIEF FOR APPELLEE: Sammy Deeb Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE BRIAN C. EDWARDS, JUDGE
ACTION NO. 10-CI-006659
OPINION
REVERSING AND REMANDING
BEFORE: ACREE, CHIEF JUDGE; JONES AND MOORE, JUDGES; ACREE, CHIEF JUDGE: Dean S. Lundert appeals from a summary judgment of the Jefferson Circuit Court which required her to reimburse Nicholas R. Davis for his contribution toward payment of the mortgage on real property which the parties owned as joint tenants with right of survivorship. Lundert argues that there were genuine issues of material fact as to whether there was an agreement regarding reimbursement, and that the trial court erred in holding that Davis was entitled to full reimbursement as a matter of law. While we have no doubt that Davis was entitled to a proper share of the proceeds of the sale of the property, we hold that he was not entitled to full reimbursement of his contribution. Hence, we reverse for entry of a new judgment.
In 2003, Lundert purchased a residence in Louisville, Kentucky. She financed the purchase with a mortgage in the amount of $95,247. In 2006, Davis began residing with Lundert and remained for about a year. He left the residence in 2007 after Lundert asked him to move out because she felt they were no longer getting along.
Several days later, the couple reunited and Davis moved back into the residence. He paid the remaining $88,037.96 balance owed on the mortgage. About the same time, Lundert executed a quitclaim deed granting Davis a joint tenancy with right of survivorship in the residence.
In 2010, the parties again separated after Lundert obtained an Emergency Protective Order (EPO) and later a Domestic Violence Order (DVO) against Davis. The DVO required Davis to permanently vacate the residence. Davis asked Lundert to repay him the sum he expended on the mortgage in exchange for leaving the residence. Lundert declined to do so. Thereafter, the parties jointly listed the property for sale.
On September 24, 2010, Davis filed this action seeking to recover his $88,037.96 contribution toward payment of the mortgage. Lundert responded that Davis's claims were barred by estoppel, laches, lack of consideration and the statute of frauds. Lundert initially denied that Davis had paid the outstanding balance of the mortgage or was entitled to relief. She subsequently conceded that Davis had made the payment and was entitled to at least half of the sale proceeds of the residence.
On January 7, 2011, Davis moved for summary judgment on his claims. The trial court granted the motion on March 29, 2011, concluding there were no genuine issues of material fact and that Davis was entitled to recover his contribution as a matter of law. Lundert now appeals.
The standard of review governing an appeal of a summary judgment is well-settled. We must determine whether the trial court erred in concluding there was "no genuine issue as to any material fact and that the moving party was entitled to a judgment as a matter of law." Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996). "[T]he proper function of summary judgment is to terminate litigation when, as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor." Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky. 1991). Since a "summary judgment involve[s] no fact finding, this Court['s] review [is] de novo, in the sense that we owe no deference to the conclusions of the trial court." Blevins v. Moran, 12 S.W.3d 698, 700 (Ky. App. 2000).
The trial court correctly recognized there is no factual dispute that Davis and Lundert owned the residence as joint tenants with right of survivorship. Furthermore, there is no dispute that Davis paid $88,037.96 to satisfy the mortgage on the residence. The dispute between the parties concerns the allocation of sale proceeds between them.
Lundert argues there were genuine issues of material fact as to whether she agreed to reimburse Davis for his contribution to the mortgage debt. The deed reflected that Davis provided "good and valuable consideration," but it does not reveal the existence of any agreement between the parties. We note that the conveyance from Lundert to Davis and herself created a survivorship form of ownership with the possibility that Davis might survive Lundert and become the sole owner. This is a valuable consideration. Lundert also notes there is no documentation of any agreement or understanding Davis would be entitled to reimbursement of his contribution when he moved out.
The parties have debated the nature of the transaction which led to Lundert's conveyance of a one-half undivided interest, with right of survivorship, to Davis and the payment of the mortgage. An examination of the quitclaim deed is unavailing since it merely recites the consideration as "in exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Grantor and Grantees[.]" We note that "true consideration in a deed may be shown by parol evidence." Ingram v. Turner, 301 S.W.2d 436, 437 (Ky. 1957) (citing Allen v. McIntosh, 276 Ky. 751, 125 S.W.2d 234 (1939)).
We have considered various means of analyzing this transaction. For example, if the conveyance had been made for no consideration (i.e., as a gift), or if the property was conveyed in consideration for Davis's agreement to return to the residence, then Davis's subsequent payment of the mortgage would entitle him to "contribution from his cotenant for liens and incumbrances paid by him, including mortgages, taxes, and ground rent." Larmon v. Larmon, 173 Ky. 477, 484, 191 S.W. 110, 113 (1917); see also Mason v. Barrett, 295 Ky. 462, 174 S.W.2d 702 (1943) (payment of taxes by one joint owner inured to benefit of other joint owners, subject to lien in favor of payor for reimbursement); Sneed's Heirs v. Atherton, 36 Ky. (6 Dana) 276, 278 (1838) (holding that tenant in common's or joint tenant's payment or satisfaction of an "adversary claim. . . inure[s] in equity to the joint benefit of each, upon the equitable terms of an equal contribution by each, in the costs of purchase.") If, on the other hand, payment of the mortgage was the consideration for the conveyance of a one-half undivided interest with right of survivorship in the property, then Davis and Lundert became mere joint tenants of the property with each owning a one-half interest. See Sneed's Heirs, 36 Ky. (6 Dana) at 279 (stating that "[t]he principle, that a purchase of an adverse claim by one joint tenant in possession, shall inure to the benefit of all the co-tenants can not apply to a purchase made before the joint tenancy commenced.") The mortgage payment in that event would be properly characterized as consideration for the conveyance of the interest as joint and equal owners and Davis and Lundert would each be entitled to one-half of the net proceeds of the sale. See Perkins v. Hardwick, 275 Ky. 182, 183, 121 S.W.2d 20, 20 (1938) (holding that joint owner was "entitled to claim is her fractional share in whatever proceeds may be derived from a sale of the jointly owned estate").
Similarly, in appropriate circumstances upon proper findings by a trial court, an unmarried couple's interests in property may be characterized as an implied partnership. See Akers v. Stamper, 410 S.W.2d 710, 711 (Ky. 1966) (trial court was entitled to believe male cohabitant's evidence that unmarried couple had entered into partnership or joint venture arrangement); Glidewell v. Glidewell, 790 S.W.2d 925, 926-27 (Ky. App. 1990). The proceeds of sale of the property in that event would be thus allocated to the parties in proportion to their respective share of any capital left after payment of partnership debts. Glidewell, 790 S.W.2d at 927.
We have considered remanding this case to the trial court for factual findings as to the precise nature of the parties' agreement, but the record as to their agreement is quite clear: Lundert agreed to convey a one-half undivided interest with right of survivorship in the property in consideration of Davis's paying the mortgage debt. Davis admits that this was the agreement: "no factual dispute that Davis and Lundert mutually agreed that Davis would satisfy the Mortgage upon the Residence as consideration for creating a joint tenancy." Appellee Brief at 8 (emphasis added). While Lundert argues that factual matters remain unresolved, she essentially agrees with Davis's assertion.
Davis made the same assertion to the trial court: "[t]here is also no factual dispute that Davis satisfied the Mortgage which encumbered the Residence in consideration of becoming a joint owner." Davis's Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment, p. 6. While we might think that Davis overpaid for his interest in the property, courts are not permitted to remake a contract for the parties. Bennett v. Dudley, 391 S.W.2d 375, 376-77 (Ky. 1965) (citation omitted).
Because the parties agree that Lundert conveyed the interest to Davis in consideration of his paying the mortgage, no factual issues of a material nature remain. The only issue is the legal consequences of the facts, and in this regard, the trial court erred. The mortgage payoff was the consideration for the conveyance. The parties thereafter owned the property as joint tenants with right of survivorship unencumbered by the mortgage debt. Upon sale, their interest continued in the proceeds. Thus, the trial court erred in granting summary judgment in favor of Davis. To the contrary, the parties are entitled to the net proceeds equally, with fifty percent to each.
The Jefferson Circuit Court's order is reversed, and this matter is remanded to that court for entry of an order reflecting proper division of the proceeds of the sale of the property.
ALL CONCUR. BRIEFS FOR APPELLANT: Mark E. Edison
Shepherdsville, Kentucky
BRIEF FOR APPELLEE: Sammy Deeb
Louisville, Kentucky