Opinion
NO. 2012-CA-002092-MR NO. 2012-CA-002143-MR
03-28-2014
REBECCA N. MORRIS APPELLANT/CROSS-APPELLEE v. CARMALEE REYNOLDS CRAMER APPELLEE/CROSS-APPELLANT
BRIEF FOR APPELLANT/CROSS- APPELLEE: Jerry A. Patton Prestonsburg, Kentucky BRIEF FOR APPELLEE/CROSS- APPELLANT: Geoffrey D. Marsh Prestonsburg, Kentucky
NOT TO BE PUBLISHED
APPEAL AND CROSS-APPEAL FROM FLOYD CIRCUIT COURT
HONORABLE JOHN DAVID CAUDILL, JUDGE
ACTION NO. 11-CI-00311
OPINION
AFFIRMING
BEFORE: DIXON, LAMBERT, AND NICKELL, JUDGES. LAMBERT, JUDGE: These appeals address the validity of deeds between a mother, Rebecca N. Morris, and her daughter, Carmalee Reynolds Cramer. On direct appeal, Morris contends that the Floyd Circuit Court erred in denying her motion for a directed verdict as well as her Kentucky Rules of Civil Procedure (CR) 15.02 motion to amend her complaint to conform to the evidence, related to her argument that one of the deeds should have been declared void and not recordable because it had not been executed in the presence of a notary public or county clerk. Cramer cross-appeals from the ruling of the trial court made during trial striking a Quit Claim Deed because it lacked a Consideration Certificate. We have thoroughly reviewed the record and the parties' respective arguments and, finding no reversible error, we affirm.
On March 11, 2011, Morris filed a verified complaint against Cramer in Floyd Circuit Court seeking a judgment ruling that two deeds signed on July 26, 2010, conveying interest in property near the Big Sandy River in Floyd County from Morris to Cramer were void and had been procured through undue influence, forgery, fraud, or mistake. Morris had originally obtained a life estate in the subject property in 1958 pursuant to a partial settlement of her divorce action from Effort Reynolds. Their daughters, Cramer and Wanda B. Harmon, were conveyed the remainder interest. In 1979, Cramer and her husband executed a quit claim deed conveying their remainder interest in the property back to Morris. The 1979 quit claim deed was recorded in 1982. In 2010, after discovering that Morris had failed to pay property taxes since 1993, Cramer and her sister paid the taxes. Cramer also decided that she wanted Morris to convey the interest in the property transferred in the 1979 quit claim deed back to her. In order to do so, Cramer copied the language in the 1979 quit claim deed, switching the names of the grantor and grantee, to affect the transfer. This instrument is the Quit Claim Deed. Morris signed the Quit Claim Deed before a notary at the bank, but when Cramer and Wanda attempted to record the instrument in the County Clerk's office, they discovered that it needed to include a Consideration Certificate. Wanda copied the information from the Quit Claim Deed onto a provided form, and the deputy county clerk signed the form acknowledging Morris's signature, which was not yet on the form. This instrument is the Deed of Conveyance. Cramer and Wanda went back to Morris's house, where Wanda explained that the new form contained the same language as the one she had signed earlier that day, but included the Consideration Certificate necessary to have it recorded. After Morris signed the Deed of Conveyance, it was recorded in the County Clerk's office.
In her complaint, Morris alleged that she had not intended to sign the Quit Claim Deed as a deed and did not intend to convey to Cramer any of her right, title, or interest in the property. Morris alleged that she had not signed the Deed of Conveyance and stated that she had recorded an affidavit dated August 24, 2010, in the County Clerk's office providing notice that her signature had been forged. She sought both compensatory and punitive damages. Cramer filed an answer defending against the complaint and disputing that Morris was entitled to punitive damages. She also filed a counterclaim seeking damages for defamation of title, fraudulent swearing, intentional infliction of emotional distress, and for back taxes Morris had failed to pay.
The matter proceeded to a jury trial on August 13 and 14, 2012. The first witness to testify was Morris, who was 84 years old at that time. Her husband died in 1993, and she had lived by herself since then. She reported having trouble with her eyesight and had problems with reading due to her vision problems. Morris had previously been married to Effort Reynolds. They had two living children, and their marriage ended in a divorce in 1958. As part of the terms of their divorce, her former husband deeded property to her for life and then to their children. Morris stated that she wanted to make sure her children had a place to live when she died. Morris introduced the 1958 deed as well as the 1979 quit claim deed, in which Cramer and her husband released their interest in the subject property to Morris. Morris did not know the circumstances surrounding Cramer's decision to release her interest.
Morris then testified about the two 2010 deeds at issue in this case. Related to the Quit Claim Deed, Morris stated that Cramer came to her house to tell her that her property was going to be sold on the courthouse steps due to her failure to pay taxes. Morris said she had been making payments on the taxes, although she was behind. Cramer did not believe her when Morris told her that she had the receipts as proof of these payments. She said she had sent her grandson to the bank with a cashier's check. On the day in question, Morris said that Cramer took her to the bank so that she (Cramer) could borrow money to pay for the taxes. Morris thought she was signing a form to allow Cramer to borrow money, and she did not know that it was a deed. She did not intend to deed the property to Cramer at that time. They returned to her home after leaving the bank. Morris denied signing the Deed of Conveyance later that day. When she found out that Cramer was claiming that she had signed two deeds, Morris signed an affidavit in an attorney's office stating that she had not signed the Deed of Conveyance that had been recorded. She had shown the documents to her son, Herman, who informed her that the documents appeared to be deeds. Morris also hired an attorney to file suit against Cramer to "do away" with the deeds. Morris testified that she wanted to continue to live in the house and that she was only interested in getting her property back. She borrowed $5,000.00 to pay her attorney fees.
On cross-examination, Morris said she thought she signed the first document at the house, but it could have been at the bank. While at the bank, she did not ask anyone to read the document for her and did not use her magnifying glass to read it. She said she trusted her daughter. She did not bring her magnifying glass to court that day, although she reported problems even reading with that. She said her now-deceased husband filed the 1979 quit claim deed in 1982. Her understanding was that she had a life estate and could remain on the property for her life, and that neither Cramer's nor Wanda's remainder interest affected her life estate. However, if she had Cramer's remainder interest, Morris would have the remainder interest to pass in her will. She did not charge her son rent to live or work on her property.
The next witness to testify was Morris's son, Herman Morris. He lived on her property in a different structure, and he had lived there his whole adult life. Herman assisted his mother with things such as transportation, taking her to doctor appointments, the grocery store, and the post office. He was aware that she had difficulties with her vision. Her two daughters had also lived on the property in the past. He did not try to motivate his mother to file the lawsuit, other than taking her to the attorney's office. He had never been asked to vacate the property. He was not in town when the documents were signed, and he never saw the documents before they were signed. Herman stated that some of the property taxes had been paid and that arrangements had been made with the County Clerk's office. He took money to the County Clerk's office to pay some of the taxes.
Morris closed her case after this testimony. Cramer moved for a directed verdict on all claims, including undue influence as to the Quit Claim Deed. She argued that the Deed of Conveyance was valid because the signature was valid; Morris had not proven that the signature was forged. Cramer argued that Morris had not established any damages. In response, Morris agreed that the only monetary damages she was seeking were for attorney fees. The court indicated that this decision was within its discretion. Related to the Deed of Conveyance, Morris argued that her testimony that she did not sign the deed rendered the issue a question for the jury. Related to the Quit Claim Deed, she argued that she was misled when she signed it and never had any intent to sign a deed or transfer any interest to her daughter. This also created a jury issue. The court ruled that the Quit Claim Deed was void and invalid because it was not recordable and therefore had no force or effect as to the title of the property. The court ordered it stricken. Regarding the Deed of Conveyance, the court noted that Morris testified that she had not signed the instrument and that the jury could believe her testimony. Therefore, the court denied the motion for directed verdict.
When the trial resumed, Cramer was the first witness to testify. She stated that she lived in Lexington, Kentucky, and is Morris's daughter. Herman is her half-brother. Her parents' marriage broke up when she was seven years old, and Morris continually told her and her sister that their father had left them and complained about his behavior. Because she did not want to hear Morris complain about her father anymore, she and her husband signed the 1979 quit claim deed and gave it to Morris. She asked Morris not to record the deed. However, Cramer found out much later from Wanda that the 1979 quit claim deed had been filed. Wanda also told her that the taxes on the property had not been paid, and after an investigation they found out that the property taxes had not been paid since 1994 and that approximately $16,000.00 in back taxes were due.
On July 26, 2010, Cramer went to Morris's house to ask about the back taxes. Cramer told her that she just had to ask if she needed money or help. When Cramer told her the taxes had not been paid, Morris told her that she had been giving the money to Herman to pay the taxes. Cramer asked Morris to transfer the property back over to her, and Morris told her that the property belonged to her and her sister. While Morris was looking for receipts, Cramer read the Quit Claim Deed to her; she had copied the earlier deed but switched the names. Cramer told her the Quit Claim Deed needed to be notarized, and a person at a nearby bank agreed to notarize Morris's signature on the deed, which was accomplished. Cramer then explained her attempts to file the Quit Claim Deed in the County Clerk's office. Cramer went on to testify that she wanted the property back because of the tax liens that had been filed against it and because no one who lived on the property was taking care of it. She and her sister ultimately decided to split the taxes, and each paid half. Cramer also expressed frustration that Morris had filed the deed in 1982 without telling her when Morris had told her that she was not going to have it recorded.
Wanda was the last witness to testify. Morris is her mother and Cramer is her sister. Wanda discovered the taxes had not been paid and notified Cramer in early July 2010. She and Cramer determined how much was due in back taxes, which had not been paid since 1994. The total was more than $16,000.00. As a favor and because they wanted their mother to have a place to live, she and Cramer paid the taxes on July 26, 2010. She was not present when Cramer and Morris went to the bank to have the Quit Claim Deed notarized. She and Cramer went to the courthouse in Prestonsburg to pay the taxes; each paid half. County Clerk Chris Waugh determined that the value of the property had been omitted from the deed, and Wanda filled in that information on the new Deed of Conveyance form. Deputy Clerk Jessica Bartley acknowledged the Deed of Conveyance without Morris's signature because Morris had already signed the Quit Claim Deed. Wanda went to Morris's house and explained the new document to her. Morris said she understood. They went back to the County Clerk's office, and the Deed of Conveyance was filed.
On cross-examination, Wanda admitted that it was to her benefit that the taxes were paid because she had a remainder interest, but the interest would not arise until her mother passed away. She maintained that she wanted her mother to have a place to live. She stated that she learned that the taxes had not been paid when she saw it in the newspaper, and then went to Chris Waugh's office to investigate it. She never asked her mother if the taxes had been paid, but she was happy to pay the taxes for her. She never considered taking Morris to the courthouse with them that day, noting that her mother was watching a little girl at the time. She maintained that she explained the Deed of Conveyance to her mother and told her it was the same form she had signed that morning with Cramer. Wanda watched her mother sign the Deed of Conveyance at the kitchen table.
After the testimony was completed, Cramer renewed her motion for a directed verdict, to which Morris objected. The court denied the motion and permitted the jury to decide the case. Morris also moved for a directed verdict related to the Deed of Conveyance, arguing that it had been notarized without a signature and that it did not meet the requirements for recording pursuant to Kentucky Revised Statutes (KRS) 382.160. Cramer contended that the issue before the court was whether her signature was forged, not whether it could be recorded. The court denied the motion because it had not been raised in the complaint. The jury returned a verdict in favor of Cramer, finding that Morris's signature had not been forged.
The trial court entered an order of proceedings on September 11, 2012, reflecting the jury's verdict that it found by clear and convincing evidence that Morris's signature on the Deed of Conveyance was not a forgery and that therefore the deed was valid. It entered a judgment the same day reflecting the jury's decision and made the order final and appealable.
Morris filed a motion to alter, amend, or vacate; a motion for a judgment notwithstanding the verdict; and a motion for a new trial. She requested that the trial court declare both deeds to be null and void based upon the evidence that the Quit Claim Deed did not include a Consideration Certificate, was not recordable, and was not executed by Morris with the intent that it constitute a deed of conveyance. Morris pointed out that the court declared the Quit Claim Deed to be null and void during the trial, but it did not reflect this ruling in the order of proceedings or judgment. Morris also requested that the court alter, amend, or vacate the judgment pursuant to CR 15.02 to permit her to amend the pleadings to conform to the issues and facts raised during the trial and order that the Deed of Conveyance was null and void and recorded in error because her signature was not duly notarized by a notary public. In the alternative, Morris requested that the court order the County Clerk's office to remove the deed from its records pursuant to KRS 382.130 because the deed was not recordable. Cramer objected to these arguments.
On September 12, 2012, Cramer moved the court for an order removing Morris's affidavit from the records of the County Clerk's office pursuant to the finding of the jury that her signature had not been forged and the judgment entered in the case. She stated that the affidavit created "a cloud on the title" and was incorrect based upon the jury's verdict. The same date, Cramer also filed a motion to reconsider or for a new trial concerning the court's order declaring that the Quit Claim Deed had no legal effect. Cramer argued that the Quit Claim Deed met the fundamental requirements for a valid and enforceable deed and that its recordability was not the subject of this litigation.
On November 8, 2012, the court entered an order granting Cramer's motion for an order removing Morris's affidavit from the records of the county clerk. By separate order entered the same date, the court denied the remaining post-trial motions filed by both parties. Morris's appeal and Cramer's cross-appeal now follow.
In her direct appeal, Morris contends that the trial court erred in denying her motion for directed verdict related to the deed considered by the jury, arguing that it was not recordable pursuant to KRS 382.130 because her signature had not been properly notarized and therefore should have been declared unenforceable. Because this issue was not raised in her complaint, Morris argued that the trial court should have permitted her to amend her pleadings to conform to the evidence pursuant to CR 15.02 so that she could present this argument.
CR 15.02 provides the mechanism to permit a party to conform his or her pleadings to the evidence:
When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleading as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that admission of such evidence would prejudice him in maintaining his action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence."Where an issue has been tried by express or implied consent, the trial court's discretion to allow amendment will not be reversed except on a showing of clear abuse." Young v. Vista Homes, Inc., 243 S.W.3d 352, 359 (Ky. App. 2007) (citing Nucor Corp. v. General Electric Co., 812 S.W.2d 136, 145 (Ky. 1991)). "The test for abuse of discretion is whether the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999) (citing 5 Am.Jur.2d Appellate Review § 695 (1995); cf. Kuprion v. Fitzgerald, 888 S.W.2d 679, 684 (Ky. 1994)).
The basis for Morris's motion to amend is KRS 382.130, which addresses when executed deeds may be recorded:
Deeds executed in this state may be admitted to record:
(1) On the acknowledgment, before the proper clerk, by the party making the deed;Morris relies on this statute to argue that the Deed of Conveyance was invalid because of the failure of the deputy clerk to properly acknowledge her signature, which she had contended was forged throughout the proceedings.
(2) By the proof of two (2) subscribing witnesses, or by the proof of one (1) subscribing witness, who also proves the attestation of the other;
(3) By the proof of two (2) witnesses that the subscribing witnesses are both dead; and also like proof of the signature of one (1) of them and of the grantor;
(4) By like proof that both of the subscribing witnesses are out of the state, or that one (1) is so absent and the other is dead; and also like proof of the signature of one (1) of the witnesses and of the grantor; or
(5) On the certificate of a county clerk of this state, or any notary public, that the deed has been acknowledged before him by the party making the deed or proved before him in the manner required by subsection (2), (3) or (4).
Cramer, on the other hand, contends that the issue in this case concerns the deed's validity, not its recordability. She asserts that the jury's finding as to the authenticity of the signature on the deed decided the deed's validity and was a prerequisite to any legal determination the trial court might make as to the ability to record the deed pursuant to KRS 382.130. Cramer relies on the former Court of Appeals' analysis of this issue in Travis v. Saunders, 198 Ky. 742, 249 S.W. 1040, 1040 (1923):
The whole theory of appellant is that the instrument was void under our statute, and therefore passed no title, because the husband did not join in the conveyance with his wife by acknowledging the same. . . . Similar questions have often been made in this state, and without exception it has been held that such instruments are valid as between the parties and those claiming under them, although they may not be recordable instruments under our statute.
We must agree with Cramer that KRS 382.130 has no effect on whether the deed in question is valid; rather, it addresses whether the deed may be recorded based upon problems with the acknowledgement as set forth in KRS 382.130(5). Therefore, we hold that the trial court properly permitted the jury to decide the factual issue of whether the signature on the deed was forged; did not abuse its discretion in denying Morris's request in her motion to alter, amend, or vacate to amend her pleadings to conform to the evidence pursuant to CR 15.02; and did not abuse its discretion in denying Morris's motion for a new trial.
In her cross-appeal, Cramer contends that the trial court erred in sua sponte striking the Quit Claim Deed between the parties because it did not contain a Consideration Certificate. KRS 382.135(1)(b) provides that "[i]n addition to any other requirement imposed by law, a deed to real property shall contain the following: . . . (b) A statement of the full consideration[.]" Cramer relies on this Court's holding in Smith v. Vest, 265 S.W.3d 246, 250 (Ky. App. 2007):
The statute did not contravene the common law regarding the validity of any deed. As between the grantor and grantee, and third parties with notice, even a complete failure to include the consideration certificate called for in KRS 382.135 will not affect the validity of a
deed if that deed contains the fundamental elements necessary to a valid and enforceable deed. The deed will remain unrecordable, however, until it substantially complies with KRS 382.135.
The deed in question is a valid deed if it contains the fundamental elements necessary to a valid and enforceable deed, which are: (1) a grantor and grantee; (2) delivery and acceptance; (3) a divesting of title by grantor and a vesting of title in the grantee. Haynes v. Barker, 239 S.W.2d 996, 997 (Ky. 1951). If each of these elements is present, the deed's recordability in this case is irrelevant.
As with Morris's direct appeal, the validity of the Quit Claim Deed is a separate question from whether the deed is recordable. Therefore, we must hold that the trial court erred as a matter of law in striking the Quit Claim Deed during the trial of this matter based upon the failure to include a Consideration Certificate.
However, we perceive no need to vacate or remand this matter based upon our decision to affirm the trial court's rulings in regard to Morris's direct appeal, which renders Cramer's protective cross-appeal moot.
For the foregoing reasons, the judgment and order on appeal are affirmed.
ALL CONCUR. BRIEF FOR APPELLANT/CROSS-
APPELLEE:
Jerry A. Patton
Prestonsburg, Kentucky
BRIEF FOR APPELLEE/CROSS-
APPELLANT:
Geoffrey D. Marsh
Prestonsburg, Kentucky