Preview:

Pursuant to Ind.Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case. ATTORNEY FOR APPELLANT: DARRELL M. AUXIER Jenner, Auxier & Pattison, LLP Madison, Indiana

FILED
Apr 26 2010, 10:08 am
of the supreme court, court of appeals and tax court

CLERK

ATTORNEY FOR APPELLEE: R. Patrick Magrath Alcorn Goering & Sage Madison, Indiana

IN THE COURT OF APPEALS OF INDIANA
MELVIN D. FORD and DEBBIE FORD, Appellants-Plaintiffs, vs. LARRY G. JONES and SHARON F. JONES, Appellees-Defendants. ) ) ) ) ) ) ) ) )

No. 39A01-0906-CV-291

APPEAL FROM THE JEFFERSON CIRCUIT COURT The Honorable Ted R. Todd, Judge Cause No. 39C01-0809-PL-648

April 26, 2010

MEMORANDUM DECISION - NOT FOR PUBLICATION

ROBB, Judge

Case Summary and Issue Melvin Dean Ford and Debbie Ford sued Larry Jones and Sharon Jones over an oral land purchase agreement. The trial court entered judgment for the Fords against Larry Jones only, in the amount of $400,000 plus interest. The Fords appeal the judgment, raising one issue, which we restate as whether the trial court properly denied them equitable relief. Concluding the Fords are entitled to relief in the form of an equitable lien on the Joneses real property, we reverse and remand that part of the trial courts judgment denying them equitable relief, and affirm the remainder of the judgment. Facts and Procedural History The Joneses, as tenants in common, are the owners of two parcels of land in Jefferson County, Indiana. The parties referred to these two parcels as the "Hanover parcel" and the "Chelsea parcel." Each parcel is comprised of approximately 100 acres. A house is situated on the Chelsea parcel and the Joneses were building a home on the Hanover parcel. Farm Credit Services of Mid-America, FLCA ("Farm Credit") held a mortgage on each parcel signed by both Larry and Sharon. The Joneses defaulted on their mortgages and Farm Credit initiated foreclosure proceedings. In March 2008, Farm Credit and the Joneses entered into an agreed summary judgment which granted judgment to Farm Credit on both mortgages in the total amount of $316,570.35, plus pre-and post-judgment interest and expenses advanced by Farm Credit, foreclosed Farm Credits mortgage liens as first and prior liens against the parcels, and ordered the parcels sold at sheriffs sale. The parties agreed Farm Credit would forbear execution for thirty days to give the Joneses an opportunity to refinance and pay the

2

judgment. The Joneses were unable to do so, however, and a sheriffs sale of the Chelsea parcel was scheduled for September 10, 2008, to be followed by a sheriffs sale of the Hanover parcel a week later on September 17, 2008.1 Larry Jones contacted Dean Ford regarding the possibility of the Fords buying the parcels. No agreement was reached until immediately before the September 10, 2008, sheriffs sale of the Chelsea parcel. At that time, Larry and Dean orally agreed the Fords would buy all of the Chelsea parcel and 95 acres of the Hanover parcel, leaving the Joneses approximately five acres of the Hanover parcel upon which the house they were building was situated. The Fords paid $400,000 directly to Farm Credit within minutes of the scheduled start of the sheriffs sale and the sheriffs sale was cancelled. An attorney then prepared a written purchase agreement intended to memorialize the oral agreement. Mrs. Jones testified that because of illness, she was not aware until after the fact that the properties were in foreclosure or that Larry had agreed to sell the properties to Dean. Dean acknowledged he never spoke to Mrs. Jones despite knowing Larry owned the properties with his wife. Larry testified that within a few minutes of reaching the agreement with Dean, he received a call from another person he had been negotiating with who offered him a better deal. The Joneses eventually informed Dean they were not going to sign the purchase agreement. The Fords filed this lawsuit seeking specific performance, imposition of a constructive trust, and imposition of a lien. Subsequent to filing the lawsuit, the Fords paid an additional

The complaint and some testimony at trial indicate the sales were set for September 11 and 18, see appellants appendix at 5, transcript at 7; but the trial court order and various other documents indicate the sales were set for September 10 and 17, see appellants app. at 19, plaintiffs exhibit 2 (affidavit of Farm Credit loan officer).

1

3

$22,000 to the county treasurer to prevent the properties from being sold at a tax sale.2 The Fords then amended their lawsuit to add an equitable subrogation count seeking to be substituted for Farm Credit in the foreclosure action. The case was tried to the bench on March 20, 2009, on the lien and equitable subrogation counts only. The trial court entered the following relevant findings of fact, conclusions of law, and judgment: FINDINGS OF FACT *** 5. Between the time of the judgment [in favor of Farm Credit] and prior to the time of the first sale, Melvin Dean Ford and Larry G. Jones entered into negotiations regarding the purchase by the Fords of some or all of the land. 6. Sharon F. Jones had no knowledge of these negotiations, nor of the pending sheriffs sales. 7. The Fords had both constructive and actual notice that Sharon Jones had an interest in the real estate. *** 11. Within fifteen minutes of the first Sheriffs sale, Mr. Jones agreed to keep only a five acre tract [of the Hanover parcel] and to sell the real estate to the Fords for $400,000. 12. On September 10, 2008, just prior to when the Sheriffs Sale was scheduled to begin, the Fords paid the sum of Four Hundred Thousand Dollars ($400,000.00) to Farm Credit. The Sheriffs Sales were cancelled. 13. Farm Credit applied the $400,000 it received from the Fords to the principal and interest owed to satisfy the two mortgages, pay its attorney fees, taxes, pay the cost of advertising, [and to pay] the sheriffs sale costs. Farm Credit has also reimbursed the Fords for payments the Fords made after September 10, 2008 on the real property taxes on the land. 14. As of March 19, 2009 Farm Credit had a balance of $43,455.15 held in escrow. 15. Although not a party to this action, Farm Credit, by its Senior Loan Officer Michael Casey, has stated, by affidavit made an exhibit in this case, "upon direction from the Court as to the entitlement to the escrow account fund balance, [Farm Credit] is more than willing to distribute the funds as so ordered."
The Fords original $400,000 payment was in excess of the amount owed by the Joneses to Farm Credit, and Farm Credit held the remainder in an escrow account. Prior to the trial in this case, the Fords were reimbursed for the tax payment from the escrow account.
2

4

16. Some time after September 10, 2008 a purchase agreement was written to commemorate the purported understanding between Mr. Jones and Mr. Ford. This agreement was never signed by any party, though the Fords were willing to do so. *** 18. Only after the proposal [sic] purchase agreement was drawn up, some days after the Fords had paid $400,000 to Farm Credit, did Sharon Jones learn of the mortgage foreclosure, of the negotiations between her husband and Mr. Ford, and of the payment by the Fords to Farm Credit. 19. Sharon [Jones] was never a part of and did not agree to any such sale. *** CONCLUSIONS OF LAW From these facts the Court makes the following conclusions of law: 1. Mr. and Mrs. Jones owned the land in question as tenants in common. 2. Neither Larry Jones [n]or Sharon Jones could convey his or her interest in the real estate in a manner that would adversely affect the right of the other to enjoy the land. 3. Larry Jones had no agency relationship with Sharon Jones that would give him the authority to bind her to an agreement to transfer her interest in the real estate. 4. There was no document in writing that would remove the transaction here in question from the requirements of Indiana Code 32-21-1-1 (The Statute of Frauds). 5. As between Sharon Jones and Mr. and Mrs. Ford, the Fords were mere volunteers when they paid the $400,000 to Farm Credit. 6. Being mere volunteers, the Fords cannot now assert the doctrine of equitable subrogation as to Sharon Jones. *** 10. Since Larry Jones lacked the power to convey his interest in the real estate in a manner that would adversely affect the right of Sharon to enjoy the land, he could not convey the land to the Fords. *** 12. At the time the Fords paid the money to the mortgagee they could thereby obtain no interest in the real estate, since Mr. Jones could not convey any such interest. Therefore, the Fords cannot have a lien on the real estate by virtue of that payment. *** 14. As to a money judgment against Larry Jones the law is with the [Fords]; as to whether the Fords have obtained an interest in any of the real estate in question, the law is with the [Joneses]. 5

JUDGMENT IT IS THEREFORE CONSIDERED, ORDERED, AND ADJUDGED by the Court that the [Fords] recover from the Defendant Larry G. Jones the sum of Four Hundred Thousand Dollars ($400,000.00) plus interest thereon at the rate of eight per cent (8%) per annum from September 10, 2008 until paid. Any funds hereafter received by Mr. and Mrs. Ford from [Farm Credit] as a result of their payment to Farm Credit of the $400,000 shall be credited against this judgment. IT IS FURTHER CONSIDERED, ORDERED, AND ADJUDGED, by the Court that the [Fords] take nothing by way of their complaint against the Defendant Sharon F. Jones. IT IS FURTHER CONSIDERED, AND DIRECTED, but not ordered, by the Court that [Farm Credit] distribute the amount held by [it] in escrow from the $400,000 received from the Fords back to the Fords. Appellants Appendix at 18-25. The Fords now appeal. Discussion and Decision I. Standard of Review The trial courts judgment contains findings of fact and conclusions thereon entered sua sponte. The findings control only as to the issues they cover, and a general judgment standard applies to any issue upon which the trial court has made no findings. Coffman v. Olson & Co., P.C., 906 N.E.2d 201, 206 (Ind. Ct. App. 2009), trans. denied. In reviewing the judgment, we determine whether the evidence supports the findings and whether the findings, in turn, support the conclusions and judgment. Id. We will reverse a judgment only when it is clearly erroneous; that is, when the judgment is unsupported by the findings of fact and the conclusions thereon, id., or when the trial court applies the wrong legal standard to properly found facts, In re Paternity of K.I., 903 N.E.2d 453, 457 (Ind. 2009). A general judgment may be affirmed on any theory supported by the evidence presented at trial. Coffman, 906 N.E.2d at 207. 6

II. Equitable Remedy The Fords contend the trial court erred in denying them an equitable remedy and granting them only a money judgment against Larry. A. Tenancy in Common We note first an error of law in the trial courts conclusions. The trial court based its judgment at least in part on the legal effect of the purported sale, concluding that "[a]t the time the Fords paid the money to the mortgagee they could thereby obtain no interest in the real estate, since Mr. Jones could not convey any such interest. Therefore, the Fords cannot have a lien on the real estate by virtue of that payment." Appellants App. at 24. The Joneses owned the parcels as tenants in common pursuant to the specific language of their deed. See Defendants Exhibit B (copy of Warranty Deed wherein "Larry G. Jones and Sharon F. Jones, husband and wife (Grantors) . . . CONVEY AND WARRANT to Larry G. Jones and Sharon F. Jones, as equal tenants in common" both parcels); Ramer v. Smith, 896 N.E.2d 563, 567 (Ind. Ct. App. 2008) (explaining where deed conveying property to husband and wife contains no qualifying words, the grantees hold the estate as tenants by the entirety; where the intention to hold the estate as joint tenants or tenants in common is clearly expressed in the deed, however, a joint tenancy or tenancy in common is created). "A tenancy in common is property held by two or more persons by several and distinct titles." Windell v. Miller, 687 N.E.2d 585, 587-88 (Ind. Ct. App. 1997). A tenant in common "may sell his undivided interest, but cannot sell or otherwise dispose of the whole property without authority from his co-tenant . . . ." Sims v. Dame, 113 Ind. 127, 15 N.E. 217, 219 (1888).

7

Tenants in common do not act as partners or as principal and agent to each other simply by virtue of their relation as cotenants. Id. Thus, where one of two cotenants purports to sell the interest of both, but the other cotenant has not sanctioned the sale, the purchaser acquires the interest of one only and becomes a tenant in common with the other. Id. Accordingly, the trial court erred as a matter of law in concluding Larry could not convey his own interest in the parcels. However, as the trial court noted, the requirements of the Statute of Frauds were not satisfied with respect to this conveyance, as there was no writing signed by Larry, and therefore Larrys interest was not conveyed to the Fords. See Appellants App. at 22 (Conclusion of Law 4, citing Ind. Code

Download 04261002mgr.pdf

Indiana Law