Opinion
NO. 2014-CA-000346-MR
01-23-2015
GARY SCHNEIDER; DENNIS SCHNEIDER; AND NANCY SCHNEIDER APPELLANTS v. LAFE NICHOLS; RUDY ROWLAND FUNERAL HOME, INC.; WELLS FARGO BANK, N.A.; INTERBAY FUNDING, LLC; CITY OF HENDERSON, KENTUCKY; AND COUNTY OF HENDERSON, KENTUCKY APPELLEES
BRIEFS FOR APPELLANTS: Harry L. Mathison Henderson, Kentucky BRIEF FOR APPELLEE LAFE NICHOLS: Charles Edward Clem Henderson, Kentucky BRIEF FOR APPELLEE RUDY ROWLAND FUNERAL HOME, INC.: Dane Shields Henderson, Kentucky
NOT TO BE PUBLISHED APPEAL FROM HENDERSON CIRCUIT COURT
HONORABLE KAREN LYNN WILSON, JUDGE
ACTION NO. 12-CI-00704
OPINION
REVERSING AND REMANDING
BEFORE: CAPERTON, MOORE AND STUMBO, JUDGES. STUMBO, JUDGE: Gary Schneider, Dennis Schneider, and Nancy Schneider appeal from an order of the Henderson Circuit Court which found that Lafe Nichols owned a 1/3 interest in certain pieces of real property. We believe the trial court needs to make further findings regarding an agreement signed by the parties; therefore, we reverse and remand for further proceedings.
Judge Caperton concurred in this opinion prior to Judge Debra Lambert being sworn in on January 5, 2015, as Judge of Division 1, Third Appellate District. Release of this opinion was delayed by administrative handling.
In 1988, Gary Schneider and Dennis Schneider (collectively referred to as Appellants), along with Lafe Nichols, purchased a piece of property (hereinafter referred to as Lot 1) located on Center Street in the city of Henderson, Kentucky. This property was purchased from Dora Carney and Hilda Posey. The deed reflects that all three purchasers were granted an equal share in the property. Located on this property is the Rudy Rowland Funeral Home. In 1990, Appellants and Nichols purchased another piece of property which adjoined the funeral home on Center Street (hereinafter referred to as Lot 2). This property was purchased from Basil Mattingly and Linda Mattingly. The deed for this property also reflects that each party was granted an equal share. In 1997, Appellants and Nichols purchased another piece of property in Henderson. This property was located on Adams Street and purchased from Shirley Mabrey. This deed reflected that Nichols would own a 1/9 interest in the property and Appellants would each own a 4/9 interest in the property. Lot 1 and Lot 2 were eventually consolidated to allow the funeral home to expand.
The parties agree that, as to the funeral home as a business entity, Nichols owns a 1/9 share in the business and Appellants each have a 4/9 share in the business.
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On October 5, 2012, Nichols filed a complaint in order to have the three pieces of property sold by judicial sale. Nichols' claim requested that he receive 1/3 of the proceeds of the sale of Lot 1 and Lot 2. Appellants argued that Nichols was only entitled to 1/9 of the proceeds from any sale of Lot 1 and Lot 2. To support this argument, Appellants submitted to the court an agreement allegedly signed by Nichols and Appellants in 1988 after the purchase of Lot 1. This agreement states in pertinent part:
THIS AGREEMENT is entered into by GARY SCHNEIDER, DENNIS SCHNEIDER and LAFE NICHOLS, collectively buyers of certain property under separate agreements entered into with Dora G. Carney and Hilda G. Posey.
1. The Parties herein agree that all right, title and interest in the real property and personal property, other than the stock in the corporation transferred to them by Dora G. Carney and Hilda G. Posey shall be held by them as tenants in common with Gary Schneider and Dennis Schneider each holding an undivided four-ninths (4/9) interest and Lafe Nichols holding an undivided one-ninth (1/9) interest.
A hearing was held on the ownership interest issue on October 16, 2013. Nichols testified that the signature on the agreement appeared to be his, but denied signing the document. He also disputed the authenticity of the agreement because the document presented to the court was a copy and not the original. Finally, he objected to its introduction into evidence. The trial court took the admissibility of the agreement under consideration, but never ruled on the issue.
On November 8, 2013, the trial court entered an order which found that Nichols owned 1/3 of Lot 1 and Lot 2. The court stated that the deeds to Lot 1 and Lot 2 were unambiguous so it would not consider extrinsic evidence when interpreting them. In essence, the court declined to consider the alleged agreement submitted by Appellants. On February 11, 2014, the court referred the matter to the Master Commissioner for judicial sale. This appeal followed.
We believe it was in error for the trial court not to make findings regarding the 1988 agreement.
The rules of construction applicable to deeds are the same rules of construction applicable to contracts. "[I]nterpretation of contracts is an issue of law for the court to decide." Because an issue of law rather than an issue of fact is involved, this court is not bound by the circuit court's decision and will review the matter de novo.Brewick v. Brewick, 121 S.W.3d 524, 526 (Ky. App. 2003)(citations omitted). The trial court was correct when it held that the intention of the parties would be gathered from the four corners of the contract and extrinsic evidence should not be considered absent ambiguity in the instrument; however, contracts can be modified by subsequent agreements. Smith v. Cloyd, 260 Ky. 393, 85 S.W.2d 873, 874 (1935); Cox v. Venters, 887 S.W.2d 563, 566 (Ky. App. 1994). Here, if the agreement is genuine, it was executed after the purchase of Lot 1 and could modify the terms of the deed as between these three parties. The trial court needs to determine if the 1988 agreement is legitimate and admissible as evidence. If so, the court will also need to determine which pieces of property, if any, the agreement pertains to.
For these reasons we reverse and remand for further proceedings consistent with this opinion.
ALL CONCUR. BRIEFS FOR APPELLANTS: Harry L. Mathison
Henderson, Kentucky
BRIEF FOR APPELLEE LAFE
NICHOLS:
Charles Edward Clem
Henderson, Kentucky
BRIEF FOR APPELLEE RUDY
ROWLAND FUNERAL HOME,
INC.:
Dane Shields
Henderson, Kentucky