Opinion
NO. 2015-CA-001778-MR
05-05-2017
ROSELLA BALL, INDIVIDUALLY AND AS EXECUTOR OF THE ESTATE OF ESTILL MCQUEEN, AND MARY ANN MULLINS APPELLANTS v. TROY CECIL EVANS APPELLEE
BRIEF FOR APPELLANT: Scott M. Webster London, Kentucky BRIEF FOR APPELLEE: David Howard London, Kentucky
NOT TO BE PUBLISHED APPEAL FROM LAUREL CIRCUIT COURT
HONORABLE GREGORY A. LAY, JUDGE
ACTION NO. 11-CI-01108 OPINION
VACATING & REMANDING
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BEFORE: JONES, D. LAMBERT, AND MAZE, JUDGES. JONES, JUDGE: Appellants, Rosella Ball and Mary Ann Mullins, appeal the Laurel Circuit Court's order granting summary judgment in favor of Appellee, Troy Cecil Evans, on their claims concerning the transfer certain of real property. After review, we vacate the circuit court's order and remand to the Laurel Circuit Court for a jury trial.
I. BACKGROUND
This appeal stems from a "family" dispute over real and personal property that formerly belonged to Estill McQueen, who is now deceased. Estill is of no blood or legal relation to any of the parties to this appeal; however, Estill raised Rosella, Mary Ann, and Troy's mother, Janice, as though they were his children. The parties have all acknowledged that Rosella and Mary Ann considered Estill to be their father, and Troy considered him to be his grandfather.
Estill's wife passed away in 2001, causing Rosella, Troy, and Mary Ann to become more involved in Estill's personal care. In 2008, Estill deeded his home (the "Real Property") to Troy for the consideration of "love and affection." Troy recorded the deed on April 7, 2008; however, Estill continued to reside in the Real Property by himself. In late 2010 or early 2011, Troy placed Estill in a nursing home. At this time, nursing home staff informed Rosella and Mary Ann that Troy had provided them with a copy of a power of attorney that Estill had executed in 2001, which gave attorney-in-fact authority to Rosella and Mary Ann. Neither Rosella nor Mary Ann had previous knowledge of the power of attorney. At Estill's request, Rosella removed him from the nursing home in October 2011 so that he could come live with her.
The parties dispute the facts following Estill's departure from the nursing home. Rosella claims that she went to the Real Property to retrieve Estill's hospital bed, scooter, and other items needed for his personal care, and found that Troy had changed the locks to the Real Property. She further claims that she contacted Troy in an attempt to reclaim Estill's property, but Troy refused. While Troy admits that he had the locks changed while Estill was in the nursing home, he claims that he told Rosella and Mary Ann that they could schedule a time to come and get the items from the Real Property, but never heard from them.
On October 27, 2011, Rosella, Mary Ann, and Estill, through his attorneys-in-fact, filed the first of the later-consolidated actions in Laurel Circuit Court, in which they alleged that Troy had wrongfully converted their personal property and sought punitive damages (the "First Action"). Estill passed away less than a week later, on November 2, 2011. Troy filed an Answer and Counterclaim on November 18, 2011, in which he sought punitive damages against Rosella and Mary Ann for wrongful institution of civil proceedings. On August 12, 2012, following initial discovery and depositions, Rosella and Mary Ann moved to amend their complaint to add claims concerning the 2008 transfer of the Real Property. In support of their motion, Rosella and Mary Ann stated that: Estill lacked the mental competency necessary to make a conveyance of real property at the time the deed was executed, the deed must be set aside and declared void because it was the product of undue influence and/or coercion, and the deed must be set aside and declared void because it was not supported by valid consideration. Troy filed an objection to the motion to amend, arguing that any claims concerning the Real Property were barred by the doctrines of laches, waiver, and estoppel. Before the court ruled on the motion, Rosella and Mary Ann filed a second action in Laurel Circuit Court seeking to set aside the 2008 deed and settle the claims of Estill's estate (the "Second Action").
By order dated September 20, 2012, the circuit court denied Rosella and Mary Ann's motion to amend their complaint in the First Action. The order stated that, as it had been four years since the subject real estate transaction had occurred, Rosella and Mary Ann had either waived any claim they may have had concerning the Real Property, or were barred by laches from asserting a claim. Following a motion by Rosella and Mary Ann to alter, vacate, or amend the order, the court entered an amended order on October 26, 2012. The amended order still denied Rosella and Mary Ann's motion to amend their complaint, but removed language mentioning the equitable doctrines. In the interim, Troy filed two motions to dismiss the Second Action - one for failure to name an indispensable party, a mortgage-holder on the Real Property, and one again arguing that Rosella and Mary Ann's claims concerning the Real Property were barred by laches and waiver. On January 9, 2013, the court issued an order denying Troy's motions to dismiss the Second Action. The court found that there was nothing in the record indicating that Rosella and Mary Ann knew of their rights relative to the Real Property prior to asserting their claims concerning it, and, as such, Troy's motions based on laches, estoppel, and waiver must be overruled. By the same order the court allowed Rosella and Mary Ann to amend their complaint to add the mortgage-holder on the Real Property as a defendant. Rosella and Mary Ann then filed an amended complaint, and Troy filed his answer and counterclaim, again seeking punitive damages for wrongful institution of civil proceedings.
Following written discovery, Troy filed a renewed motion to dismiss the Second Action on September 24, 2013, in which he maintained his position that the claims concerning the Real Property were barred by laches and estoppel, and sought to dismiss Rosella and Mary Ann's claims seeking punitive damages against him. The circuit court, treating the motion to dismiss as a motion for summary judgment, issued an order on January 3, 2014, finding that laches barred Rosella and Mary Ann's claims relevant to the deed and granting summary judgment on the issue in favor of Troy. The court found that additional discovery had shown that Rosella and Mary Ann had been aware of the circumstances surrounding the Real Property transfer shortly after it had occurred, but had failed to file any claims concerning the transfer until 2012. The court further found that this delay had caused a disadvantage to Troy, in that he had paid property taxes on the Real Property for several years and had used the Real Property as collateral for a loan. Rosella and Mary Ann moved to alter, amend, or vacate the court's order on January 9, 2014, and the court overruled their motion by order dated February 17, 2014.
This left remaining the claim for conversion of personalty and counterclaim for wrongful use of civil proceedings in the First Action and the estate settlement and counterclaim for wrongful use of civil proceedings in the Second Action. Following a motion by Rosella and Mary Ann, the court consolidated the First Action and the Second Action on March 21, 2014. The parties went to mediation, which resulted in dismissal of the remaining claims by and against Mary Ann on May 1, 2015. On October 27, 2015, the court entered an order making the dismissal of the claims related to the Real Property final and appealable pursuant to CR 54.02. This appeal followed.
Kentucky Rules of Civil Procedure.
II. STANDARD OF REVIEW
When hearing a motion for summary judgment, a trial court must view the record "in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor." Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky. 1991). Summary judgment is appropriate if "it appears impossible in a practical sense for the respondent to prevail at trial." Haugh v. City of Louisville, 242 S.W.3d 683, 686 (Ky. App. 2007). On appeal, "[t]he standard of review . . . of a summary judgment is whether the circuit judge correctly found that there were no issues as to any material fact and that the moving party was entitled to a judgment as a matter of law." Caniff v. CSX Transp., Inc., 438 S.W.3d 368, 372 (Ky. 2014). "Because summary judgments involve no fact finding, this Court reviews them 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).
III. ANALYSIS
On appeal, Rosella and Mary Ann assert that: (1) the Laurel Circuit Court erred in finding that their claims were barred by laches because in so doing the court shortened the applicable statute of limitations, and (2) the circuit court erred in dismissing their claims regarding the Real Property on summary judgment, rather than having a trial or evidentiary hearing, as there are genuine issues of material fact concerning the reasonableness of the delay and the prejudice to Troy.
To support their first argument, Rosella and Mary Ann point to the fact that "an action to set aside a deed on the ground of undue influence is . . . governed by the five year statute of limitations set forth in KRS 413.120(12) as may be extended by KRS 413.130(3)." Skaggs v. Vaughn, 550 S.W.2d 574, 579 (Ky. App. 1977) (citing Bostic v. Bostic, 264 S.W.2d 59 (Ky. 1954); Tucker v. Tucker's Ex'r, 257 S.W. 46 (Ky. 1923)). Rosella and Mary Ann also cite Hinkle v. Commonwealth, 104 S.W.3d 778 (Ky. App. 2002), in which this Court stated that "[g]enerally, of course, where the legislature has named a limitations period by statute, a court will not vary the period in equity." Id. at 782 (citing Karami v. Roberts, 706 S.W.2d 843 (Ky. App. 1986); Gover's Adm'r v. Dunagan, 184 S.W.2d 225, 226 (Ky. 1944)). Because they sought to amend their complaint to assert claims concerning the Real Property before the applicable statute of limitations had run, Rosella and Mary Ann contend that they cannot be precluded from asserting their claims on the basis of laches.
Kentucky Revised Statutes.
The reference to KRS 413.120(12) was to what is now KRS 413.120(11). Subsections of the statute were amended and renumbered in 2015. See Act of April 3, 2015, 2015 Kentucky Laws Ch. 121 (HB 104). --------
While it is indeed true that the statute of limitations had not yet run when Rosella and Mary Ann sought to amend their complaint, we find this argument to be without merit. "Laches is an equitable doctrine, the elements of which are short of an estoppel, and the time in which it may ripen is short of the applicable period of limitation[.]" P.V. & K. Coal Co. v. Kelly, 191 S.W.2d 231, 233 (Ky. 1945) (quoting Klineline, Sr. v. Head, 266 S.W. 370, 372 (Ky. 1924)). Laches does not bar a claim as a matter of law, rather, as an equitable doctrine, it "serves to bar claims in circumstances where a party engages in unreasonable delay to the prejudice of others rendering it inequitable to allow that party to reverse a previous course of action." Plaza Condo. Ass'n, Inc. v. Wellington Corp., 920 S.W.2d 51, 54 (Ky. 1996). "Prior to the expiration of the limitation period, however, one claiming a bar based on delay must also show prejudice." Id. Therefore, as long as Troy was able to prove the elements of laches, the circuit court was within its right to dismiss the claims concerning the Real Property despite the fact that the statute of limitations had not yet run. The remaining question, then, is whether the circuit court was correct in its determination that there were no genuine issues of material fact regarding Troy's argument that Rosella and Mary Ann's claims were barred by laches.
In finding that summary judgment was appropriate, the greater part of the circuit court's analysis was on the unreasonable delay element. In its previous order denying Troy's motion for summary judgment, the circuit court found that, while it was clear that a "great deal of time had passed" between the transaction and Rosella and Mary Ann's attempt to enforce their rights, summary judgment was inappropriate because there was "no direct indication that [Rosella and Mary Ann] knew of [their] rights prior to their attempt to enforce them." In granting summary judgment, however, the circuit court's focus was not on Rosella and Mary Ann's knowledge of their rights, but on the amount of time that had passed - the court noted that discovery had shown that Rosella and Mary Ann were aware of Estill's possible mental incapacitation as early as 2006, had learned of Estill's transfer of the Real Property in 2008, but had waited until 2012, after Estill was deceased, to file an action to set aside the property transfer.
The circuit court found that Rosella and Mary Ann's inaction was directly analogous to the appellant's actions in Denison v. McCann, 197 S.W.2d 248 (Ky. 1946), in which the court found that an action to set aside a deed was precluded by the doctrine of laches. To be sure, there are certain similarities between Denison and the present case. In Denison, the appellant sought to set aside a deed that had been executed by her mother to one of her siblings, claiming undue influence. Like in the present case, the appellant learned of the transaction shortly after the deed had been delivered, but failed to challenge the deed until after her mother had passed away.
Unlike the present case, however, the appellant in Denison admitted that she knew she had standing to challenge the deed when it was executed, but waited to do so because she did not want her mother to "take the deed back and make one that will stick." Id. at 249. There is no indication in the record that Rosella and Mary Ann were attempting to engage in the same kind of trickery as the appellant in Denison. More importantly, "[t]he defense of laches requires a showing that the party knew his rights and did not attempt to enforce them until the condition of the party who set up the defense has been so changed that he cannot be restored to his former state." Holloway Ready Mix Co. v. Monfort, 474 S.W.2d 80, 83 (Ky. 1968) (emphasis added). While Rosella and Mary Ann knew that Estill had executed the deed in 2008, they did not learn of the Power of Attorney - and likewise their right to challenge the deed - until late 2011, a few months before Estill passed away. Taking this fact into consideration, especially when viewing the facts in a light most favorable to Mary Ann and Rosella, as required on a motion for summary judgment, does not clearly lead to a finding that Mary Ann and Rosella waited an unreasonable amount of time before bringing their claims.
Concerning the element of prejudice, the circuit court found that Troy had suffered injury in that he had paid property taxes on the Real Property for several years and had used the Real Property as collateral for a loan. The circuit court further agreed with Troy's contention that, because Rosella and Mary Ann waited until after Estill's death to bring claims concerning the Real Property, Troy was put at a disadvantage in defending the claims asserted against him. In so agreeing, the circuit court disregarded Rosella and Mary Ann's arguments that Estill's inability to be examined at present date did not work substantial prejudice against Troy, as there are ample medical records from the time the deed was executed that can attest to Estill's mental and physical condition at that time.
As to what is unreasonable delay is a question always dependent on the facts in the particular case. Where the resulting harm or disadvantage is great, a relative brief period of delay may constitute a defense while a similar period under other circumstances may not. What is the equity of the case is the controlling question.Denison, 197 S.W.2d. at 249 (quoting City of Paducah v. Gillispie, 115 S.W.2d 574, 575 (Ky. 1938)). Whether the gap in time between Rosella and Mary Ann's discovery of their right to challenge the deed and the time they sought to enforce that right is unreasonable, and whether the prejudice, if any, this delay has caused Troy "prevents him from being restored to his former state" are questions of fact that should have been determined by a jury, not decided on summary judgment.
IV. CONCLUSION
For the foregoing reasons, we vacate the circuit court's dismissal of the claims concerning the Real Property and remand the matter for a trial by jury.
ALL CONCUR. BRIEF FOR APPELLANT: Scott M. Webster
London, Kentucky BRIEF FOR APPELLEE: David Howard
London, Kentucky