Opinion
C.A. No. 20459-NC.
Submitted: September 4, 2003.
December 5, 2003.
Elwyn Evans, Jr., Esquire.
Douglas A. Shachtman, Esquire.
Dear Counsel:
Defendant Curtis Laws ("Laws") has moved for cancellation of the notice of lis pendens recorded on behalf of Plaintiffs against real property titled in his name in NeA, Castle County, Delaware.
This application is governed by 25 Del. C. § 1608, which authorizes the Court to direct the Recorder of Deeds to cancel a notice of lis pendens "if the coui7t determines that there is not a probability that finalwill be entered in favor of the party recording the notice of pendency. The party recording the notice of pendency shall bear the burden of establishing such probability."
Plaintiffs are the siblings and a niece of Laws. Plaintiffs and Laws inherited the property by intestacy from their mother (or grandmother). Plaintiffs executed and delivered a deed to the property to Laws on February 5, 2003. The deed, which contains no reservations of any nature for the benefit of Plaintiffs, was duly recorded. Several months after acquiring title, Laws agreed to sell the property to a third party. This action and the filing of the notice of lis pendens ensued.
Plaintiffs filed this action because, they allege, Laws materially deviated from the agreements that accompanied the conveyance of the property to him. These agreements were reached in an effort to address the conflicting goals of the several owners of the property. Two of the Plaintiffs are disabled; they have resided in the property for some time and desire to continue to reside there. Some of the Plaintiffs wanted to cash out their interests in the property. The property was also burdened with debt. Laws came forward with a solution. According to Plaintiffs, he proposed to take title to the property, obtain mortgage financing, address the outstanding debts, pay some of the Plaintiffs for their interests in the property, and allow the two disabled Plaintiffs to continue using the property as their residence. Unfortunately, neither that agreement nor any other agreement regarding the terms of the conveyance was reduced to writing. Laws was not able to secure the necessary mortgage financing and, thereafter, attempted to sell the property free and clear of any interest of the Plaintiffs, including any right of the two disabled Plaintiffs to continue residing in the dwelling.
These facts are drawn primarily from the Affidavit of Plaintiff Catherine L. Kogut.
Curiously, neither side sought to augment the record with input from the attorney who handled the transaction or with any closing documents except for the deed.
In his application to obtain cancellation of the notice of lis pendens, Laws has offered to deposit sale proceeds in escrow pending resolution of the dispute.
The record in this case, even considering its preliminary nature is far from clear. I am satisfied, however, that Plaintiffs have demonstrated a probability of success on their claim that the parties intended that the interests of the two disabled siblings be protected through either a life estate or, more accurately, a constructive trust in the property. See, e.g., Elliott v. Holladay, 2003 WL 1240497, at *5 (Del.Ch. Mar. 7, 2003). That a continuing obligation to the Plaintiffs was to be borne by Laws is consistent with the fact that he has not paid any consideration directly to any of the Plaintiffs. If all Plaintiffs intended to have their interests liquidated at the time the property was conveyed, that consideration could have been delivered (if not by cash) by a purchase money bond and mortgage. Laws contends that there was no agreement and emphasizes that the deed contains no limitation on his title, but he fails to set forth any reasonable explanation of why the Plaintiffs conveyed the property to him as they did. Thus, Laws' motion to cancel the notice of lis pendens is denied.
Rescission may also be an appropriate remedy.
It may be that some of the Plaintiffs had sought to sell the property and had been unsuccessful; that they had grown tired of the burdens associated with property ownership; and that they were simply glad to have any means of extracting themselves from the difficulties associated with ownership of the property. Whether that is the ultimate explanation for what happened remains to be seen. On the present record, it is not a reasonable inference.
I note that, if Plaintiffs prevail, Laws may well be entitled to reimbursement of the expenses which he has incurred while holding title to the property.
I ask that counsel confer and propose a case scheduling order with the goal of a trial (or case dispositive motions, if appropriate) by early spring 2004.