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HomeMy WebLinkAbout99-1185 CivilALLEN DIMELER RETHERFORD, SR., ALLEN DIMELER RETHERFORD, JR., and MATTHEW ALAN RETHERFORD, Plaintiffs Vo EDWARD P. GROSS, INDIVIDUALLY, and EDWARD P. GROSS, AS EXECUTOR OF THE ESTATE OF MARY JANE GROS S, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 99-1185 CIVIL TERM IN RE: ADJUDICATION BEFORE OLER, J. OPINION and VERDICT OLER, J., September 24, 2003 In this civil action, three individual plaintiffs have sued a defendant, individually and in his capacity as executor of an estate, (a) in ejectment, (b) for breach of contract, and (c) in the alternative for unjust enrichment. 1 Defendant has filed a counterclaim for rescission of the contract.2 The contract in question was an agreement of sale for real property executed by Defendant's decedent as seller and Plaintiffs as buyers.3 Defenses to enforcement of the agreement advanced by Defendant are (a) undue influence arising out of a confidential Plaintiffs' amended complaint, filed March 14, 2000. Defendants' answer with new matter and counterclaim, filed May 8, 2000. Plaintiffs' Ex. 6, Trial, February 10, 2003 (hereinafter Plaintiffs' Ex. /Defendant's Ex. relationship between Plaintiffs and Defendant's decedent and (b) lack of mental capacity on the part of Defendant's decedent.4 Defendant's counterclaim for rescission of the agreement of sale is likewise premised upon undue influence and lack of mental capacity.5 A nonjury trial on Plaintiffs' complaint and Defendants' counterclaim was held on February 10, 2003.6 For the reasons stated in this opinion, the court will find in favor of Plaintiffs and against Defendant in his capacity as executor. FINDINGS OF FACT 1. Plaintiffs are Allen Dimeler Retherford, Sr., 51,7 and his two adult sons,8 Allen Dimeler Retherford, Jr., and Matthew Alan Retherford.9 2. Plaintiffs operate an outdoor fruit and vegetable retail sales business~° at 3525 Carlisle Pike, Camp Hill, Hampden Township, Cumberland County, Pennsylvania. ~ 3. Defendant is Edward P. Gross, 56,~2 an individual residing at 301 Big Oak Road, Dillsburg, York County, Pennsylvania. ~3 4. Defendant is the executor of the estate of his mother, Mary Jane Gross (Defendant's decedent),TM having been granted letters testamentary pursuant to his nomination as executor in her will;~5 he is also the sole beneficiary of her estate.~6 4 Defendant's trial brief at 4-5. Sld. 6 Pursuant to a stipulation of counsel, the record was declared closed on June 4, 2003. See Order of Court, June 4, 2003. v N.T. 32, Trial, February 10, 2003 (hereinafter N.T. __). 8N.T. 13. 9 Plaintiffs' amended complaint, para. 1; Defendant's answer with new matter and counterclaim, para. 1. l0 N.T. 9. ~ Plaintiffs' complaint, para. 1; Defendant's answer with new matter and counterclaim, para. 1. l: N.T. 35. ~s Plaintiffs' complaint, para. 2; Defendant's answer with new matter and counterclaim, para. 2; N.T. 35- 36. 14 N.T. 35. 15 N.T. 35. 2 5. Defendant's decedent was born on July 1, 1908.17 6. Defendant's decedent and her husband acquired the real estate which is the subject of this litigation, located at 3525 Carlisle Pike, Camp Hill, Hampden Township, Cumberland County, Pennsylvania, 18 in 1947.~9 7. The property consisted of .55 acres, and contained a small 1-1/2 story house 20 and a garage. Commencing in 1948, Defendant's decedent and her husband resided in the o heuse.2~ 9. Commencing in 1955, Defendant's decedent and her husband also operated a produce stand on the premises.22 10. Following her husband's death in 1965, Defendant's decedent continued to reside on the premises alone; she also continued to operate the fruit stand for about six years, with Defendant, her sen.23 11. Commencing about 1971, Defendant's decedent rented the produce stand out to venders.24 12. Commencing about 1992, Plaintiffs became the lessees/vendors of the produce stand.25 13. Eventually, Plaintiffs began renting the garage in connection with the sale of produce, as well as the outside area,26 and Defendant's decedent and Plaintiffs began to contemplate the ultimate purchase of the entire property by Plaintiffs)7 ~6 N.T. 51. ~7 N.T. 36. ~8 N.T. 9, 35. 19 Plaintiffs' Exhibit 1. 2o Plaintiffs' Exhibit 8 (letter dated January 18, 2001, accompanying appraisal report). 2~ N.T. 36. 22 N.T. 37. 23 N.T. 36-37. 24 N.T. 37. :s N.T. 10. 3 14. to the garage. 15. As of April 6, 1998, a fair market value Defendant's decedent at 3525 Carlisle Pike, Camp Cumberland County, Pennsylvania, was $200,000.00.29 Plaintiffs contributed approximately $35,000.00 in improvements and repairs for the property owned by Hill, Hampden Township, 16. On April 6, 1998, Defendant's decedent as seller and Plaintiffs entered into an agreement of sale for this property; the purchase price under the agreement was $200,000.00.3o 17. Aspects of the agreement of sale favorable to Defendant's decedent included (a) her retention of a life estate in the residence, (b) Plaintiffs' assumption of immediate responsibility for all property and liability insurance premiums, water and sewer bills, property taxes, and maintenance expenses related to the property, (c) receipt of a steady monthly income arising out of seller financing of the purchase, and (d) retention of the deed in escrow pending payment in full.31 18. Aspects of the agreement of sale favorable to the Plaintiffs included (a) the absence of a down payment and (b) seller financing at a 5% interest rate per annum over a 30-year term.32 19. The agreement of sale provided for payment of attorney's fees incurred by a party in enforcement of the terms of the agreement against a party in breach.33 26 N.T. 11. 27 N.T. 15-16. 28 N.T. 13. 29N.T. 117, 121. 30 Plaintiffs' Exhibit 6. 3~ Id. 32 Id.; N.T. 124-35. With respect to the absence of a down payment, however, it may be noted that Plaintiffs had already contributed to the value of the property by improvements and repairs costing approximately $35,000.00. 33 Plaintiffs' Exhibit 6. 4 20. The relationship between Plaintiffs and Defendant's decedent was not a confidential retationship.34 21. The agreement of sale was not the product of undue influence on the part of Ptaintiffs.35 22. The agreement of sale was neither unfair nor unconscionable. 23. Defendant's decedent did not lack the mental capacity to enter into the agreement of sate.36 24. On November 23, 1998, Defendant's decedent died37 at her home of natural but unspecified causes. 25. Defendant, in his capacity as the decedent's personal representative, has refused to recognize the validity of the agreement of sale and has refused to permit Plaintiffs access to the residence, with the exception of the basement and a bathroom.39 26. Plaintiffs have made all payments required under the agreement of sate.4° 27. A fair market rental value for the property as of the death of Defendant's decedent was $500.00 per month.4~ 28. Among other expenses incurred by Plaintiffs as a result of their being out of possession of the property was a bill for $250.00 for repairs to frozen pipes.42 34 The parties had engaged in formal business transactions in the past, and were obviously acquaintances. See, e.g., Plaintiffs' Exhibits 4-6. However, the record does not support a finding of a confidential relationship. 35 N.T. 16-18. 36 N.T. 16-18, 21-22, 30, 48-59, 60, 62, 64-67, 97-101,105-117. 37 N.T. 18. 38 N.T. 96. 39 N.T. 18-19. 40 N.T. 17. These payments have largely been placed in escrow pending the outcome of this litigation. N.T. 7. 41N.T. 131. 42 N.T. 20-21; Plaintiffs' Exhibit 7. 5 29. Fair, reasonable and necessary43 attorney's fees in the amount of $16,485.00 have been incurred by Plaintiffs in the prosecution of their rights under the agreement of sale.44 DISCUSSION Statement of Law Ejectment. An action in ejectment is an action at law. Goodwin v. Rodriguez, 520 Pa. 296, 300-01, 554 A.2d 6, 7-8 (1989). However, the Pennsylvania Supreme Court has recognized that an ejectment action partakes of some equitable characteristics. Goodwin, 520 Pa. at 300-01, 554 A.2d at 8 (citingAngelcyk v. Angelcyk, 367 Pa. 381, 80 A.2d 753 (1951)); see also Hankin v. Mintz, 276 Pa. Super. 538, 419 A.2d 588 (1980); Lachner v. Swanson, 251 Pa. Super. 561,380 A.2d 922 (1977). "Our system of civil proceedings often permits the 'commingling' of legal and equitable matters in a single action... [and] this is certainly so with respect to actions of ejectment." Goodwin, 520 Pa. at 300-01, 554 A.2d at 8. Thus, equitable defenses have been entertained in actions of ejectment. See Goodwin, 520 Pa. at 301,554 A.2d at 8. "The plaintiff[' s] burden in an action in ejectment at law is clear: they must establish the right to immediate exclusive possession." Doman v. Brogan, 405 Pa. Super. 254, 263,592 A.2d 104, 108 (1991); see, e.g., Hallman v. Turns, 334 Pa. Super. 184, 482 A.2d 1284 (1984); Harbor Marine Co. v. Nolan, 244 Pa. Super. 102, 366 A.2d 936 (1976). In an action for ejectment, the plaintiff's burden of proof is by a preponderance of the evidence. Anderson v. Lilke Family Ltd P 'ship, 2000 Pa. Super. 73, ¶3, 748 A.2d 737, 739 (2000). In such an action, "[t]he plaintiff may state in the complaint any cause of action for rents, profits or any other damages which arise from the defendant's possession of the land." Pa. R.C.P. 1055. 43 N.T. 5. 44 Plaintiffs' Exhibit 2. 6 Confidential relationship and undue influence. "The burden of proving undue influence rests upon the party asserting it unless that party can prove a confidential relationship between the [parties], in which case the burden of proof must shift to the party asserting the validity of the [transaction] to prove it was obtained by the free, voluntary and intelligent act of the [other party]." Thomas v. Seaman, 451 Pa. 347, 353, 304 A.2d 134, 138 (1973) (citing Dzierski Estate, 449 Pa. 285, 296 A.2d 716 (1972); Sendick v. Matvey, 391 Pa. 286, 138 A.2d 92 (1957)). If a confidential relationship is found to exist, the law presumes the transaction void, and, at that point, the party seeking to maintain the validity of the transaction must affirmatively show that there was no deception involved and that the agreement was "fair, conscientious, and beyond the reach of suspicion." Leedom v. Palmer, 274 Pa. 22, 25, 117 A. 410, 411 (1922); see also Frorven v. Blank, 493 Pa. 137, 148, 425 A.2d 412, 418 (1981); Ruggieri v. West Forum Corp., 444 Pa. 175, 180, 282 A.2d 304, 307 (1971); Iron Worker's Say. & LoanAss 'n. v. IWS, Inc., 424 Pa. Super. 255, 270, 622 A.2d 367, 375 (1993). With respect to a confidential relationship, the term may be said to apply to any relationship existing between parties to a transaction wherein one of the parties is bound to act with the utmost good faith for the benefit of the other party, and can take no advantage to himself from his acts relating to the interest of the other party. Biddle v. dohnsonbaugh, 444 Pa. Super. 450, 455-56, 664 A.2d 159, 161-62 (citingln re Estate of Mihm, 345 Pa. Super. 1, 7, 497 A.2d 612, 615 (1985)). A confidential relationship is deemed to exist as a matter of law between a trustee and cestui que trust, guardian and ward, attorney and client, and principal and agent. Biddle, 444 Pa. Super. at 456, 664 A.2d at 162. However, "a confidential relationship is not limited to any particular association of parties but exists wherever one occupies toward another such a position of advisor or counselor as reasonably to inspire confidence that he will act in good faith for the other's interest." Id. (quoting Brooks v. Conston, 356 Pa. 69, 76, 51 A.2d 684, 688 (1945)). In a confidential relationship, there is an overpowering influence, and, in the other, a weakness, dependence or trust. Id. (citing Frorven, 493 Pa. at 145, 425 A.2d at 416). 7 Such a relationship is shown when it is established that one occupies a superior position over the other intellectually, physically, governmentally, or morally, with the opportunity to use the superiority to the other's disadvantage. Walsh v. Bucalo, 423 Pa. Super. 25, 28, 620 A.2d 21, 23 (1993). However, "where undue influence and incompetence do not appear, and the relation between the parties is not one ordinarily known as confidential in law, the evidence to sustain a confidential relation must be certain; it cannot arise from suspicion or from infrequent or unrelated acts .... "Id. 423 Pa. Super. at 29, 620 A. at 23 (citingLeedom, 274 Pa. at 26, 117 A. at 412). With respect to undue influence, it has been said that: [u]ndue influence which will avoid a [conveyance of real estate] is such influence as is obtained by excessive importunity, superiority of will or mind, or by any other means constraining the grantor to do what he is unable to refuse. Whether such improper influence was exercised must usually be inferred from the facts and circumstances of the particular case, such as the situation of the grantor and his relation to others, his condition of health and its effect upon body and mind, his dependence upon, and subjection to, the persons claimed to have influenced him and their opportunity to wield such influence. Teat; v. Anderson, 358 Pa. 523, 528-29, 58 A.2d 31, 33 (1946). "A conveyance of real estate by way of deed is presumptively valid and will not be set aside unless it is shown by clear and convincing evidence that the transfer was improperly induced by fraud or other misconduct on the part of the transferee .... "Wagner v. Wagner, 466 Pa. 532, 541,353 A.2d 819, 823-24 (1976). Mental incapacity. In Pennsylvania, it is presumed that an adult is competent to enter into an agreement and a signed document is evidence that the agreement accurately expresses the state of mind of the signor. Taylor v. Avl, 272 Pa. Super. 291, 296, 415 A.2d 894, 896 (1979). To rebut this presumption, a party seeking to void a contract must present evidence of mental incompetency which is "clear, precise and convincing." Id. (citing and quoting Elliott v. Clawson, 416 Pa. 34, 35, 204 A.2d 272, 273 (1964)). "Mere weakness of intellect resulting from sickness or old age is not legal grounds for voiding the positive acts such as deeds, contracts, wills, etc., if sufficient intelligence 8 remains to comprehend the transaction." Dulnikowski v. Stanziano, 195 Pa. Super. 508, 510, 172 A.2d 182, 183-84 (1961). Proof of old age, illness, physical disability, failure of memory, garrulous repetition, or peculiar beliefs and opinions is generally insufficient in itself to show incompetency. See Kisk v. Bakaysa, 330 Pa. 533, 536, 199 A.2d 321, 323 (1938) (citations omitted). "[W]here mental capacity is at issue, the real question is the condition of the person at the very time he executed the instrument or made the gift in question." Taylor, 272 Pa. Super. at 297-98, 415 A.2d at 897 (quotingSobe! v. Sobel, 435 Pa. 80, 82-83,254 A.2d 649, 651 (1969)). Thus, the usefulness to the trier of fact of the opinion of an expert on the subject may be significantly reduced as the proximity of his or her examination to the event in question decreases. See Moorehead v. Scovel, 210 Pa. 446, 60 A. 13 (1904). Application of Law to Facts In the present case, with respect to the issue of a confidential relationship, the evidence did not support the existence of such a relationship between Plaintiffs and Defendant's decedent. The nature of the association was not of a type which could be characterized as a confidential relationship per se, nor were there familial elements which might have imposed a sense of obligation or special trust upon Plaintiffs' decedent. While some measure of friendship between Plaintiff Allen Dimeler Retherford, Sr., and Plaintiff's decedent undoubtedly existed, the history of the parties' interaction was primarily commercial in nature, with neither having an advantage over the other and Defendant's decedent having received the benefit of substantial improvements to her property at Plaintiffs' expense, without legal obligation on their part. With respect to undue influence, the evidence similarly did not support a conclusion that the agreement of sale was a product thereof. In this regard, several factors militated against such a finding, including the coincidence of the purchase price with fair market value, the terms of the agreement of particular advantage to Defendant's decedent given her circumstances, the absence of indicia of excessive importunity on the part of Plaintiffs or constraints upon Defendant's decedent overwhelming her will, and the demonstrated ability of Defendant's decedent to maintain an independent lifestyle. 9 Finally, with respect to mental capacity, the record did not lead the court to agree with the position of Defendant that his decedent lacked competency to enter into the agreement of sale. To the contrary, evidence (a) as to the decedent's contemporaneous maintenance of her own household,4s independent shopping,46 management of her own finances,47 operation of Plaintiffs' produce business in their absence,48 and execution of a power of attorney in favor of Defendant in the presence of an attorney retained by Defendant,49 (b) as to Defendant's acceptance of the power of attorney, subsequent acceptance of money for a truck from his decedent,so and deferral to his decedent's wishes as to medical treatment for a certain physical injury,s~ and (c) in the form of testimony of acquaintances of Defendant's decedent, including Robert J. Trace, Esq., of Camp Hill, Pennsylvania, who had known her since 1953,s2 as to her apparent mental acuitys3 strongly supported the proposition that she was competent at the time in question. The opinion to the contrary of a psychologist presented by Defendant by way of a deposition,s4 while considered by the court, was effectively challenged by a psychologist presented by Plaintiffs,ss in the court's view. In this regard, Plaintiffs' expert pointed to perceived deficiencies in testing procedures employed by Defendant's expert,s6 to the potential effect of a head injury suffered in a fall by Defendant's decedent after execution 45 N.T. 48-50, 53. 46 N.T. 53. 47 N.T. 49, 60. 48 N.T. 21-22, 24, 98-99. 49 N.T. 39, 50-51. 50 N.T. 77-78. 5~ N.T. 56-57, 94. 52 N.T. 65. N.T. 64-67, 97-101. Defendant's Exhibit 5. N.T. 105-17. 56N.T. 110-11, 112-14. 10 of the agreement of sale and prior to her examination by Defendant's expert,57 to the lapse of more than six months between the execution of the agreement of sale and the examination by Defendant's expert, with the concomitant implausibility of a relation- back of his diagnosis,58 and to numerous indicia of the competency of Defendant's decedent at the critical time.59 The court was not persuaded, however, that Defendant had acted in an individual capacity - i.e., in a capacity other than as the decedent's personal representative - in declining to acquiesce in the validity of the agreement of sale. Nor was it persuaded that the full rental value of the property should be awarded to Plaintiffs, inasmuch as their exclusion from the property by Defendant was less than total. CONCLUSIONS OF LAW 1. The court has jurisdiction over the parties and subject matter of this litigation. 2. The agreement of sale between Defendant's decedent as seller and Plaintiffs as buyers dated April 6, 1998, relating to property situated at 3525 Carlisle Pike, Camp Hill, Hampden Township, Cumberland County, Pennsylvania, is enforceable according to its terms. VERDICT AND NOW, this 24th day of September, 2003, upon consideration of Plaintiffs' complaint and of Defendant's counterclaim, following a nonjury trial, and for the reasons stated in the accompanying opinion, the court finds (a) in favor of Plaintiffs and against Defendant in his capacity as executor of the estate of Mary Jane Gross on Plaintiffs' complaint, and (b) in favor of Plaintiffs and against Defendant on Defendant's counterclaim, and it is accordingly ordered and directed as follows: 1. Defendant is ejected from the premises situated at 3525 Carlisle Pike, Camp Hill, Hampden Township, Cumberland County, Pennsylvania; 57 N.T. 111-12. 58 N.T. 1 14. 59 N.T. 113. 11 2. Damages are awarded to Plaintiffs in the amounts of a. Costs of suit; b. Attorney's fees of $16,485.00; c. Plumbing expenses of $250.00; and d. Rental value of the withheld premises at the rate of $350.00 per month from November 23, 1998, plus interest at the legal rate; 3. Subject to any setoff necessary to accommodate the above award to Plaintiffs, sums due, including interest, from Plaintiffs on the purchase price according to the terms of the agreement of sale between Defendant's decedent as seller and Plaintiffs as buyers shall be paid to the Estate of Mary Jane Gross or her devisee; and 4. No other relief is afforded to either party. BY THE COURT, William L. Adler, Esq. 125 Locust Street P.O. Box 11933 Harrisburg, PA 17108 Attorney for Plaintiffs William C. Dissinger, Esq. 28 N. 32nd Street Camp Hill, PA 17011 Attorney for Defendant s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. ~rc 12 13 ALLEN DIMELER RETHERFORD, SR., ALLEN DIMELER RETHERFORD, JR., and MATTHEW ALAN RETHERFORD, Plaintiffs IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Vo CIVIL ACTION - LAW EDWARD P. GROSS, INDIVIDUALLY, and EDWARD P. GROSS, AS EXECUTOR OF THE ESTATE OF MARY JANE GROS S, Defendants NO. 99-1185 CIVIL TERM IN RE: ADJUDICATION BEFORE OLER, J. VERDICT AND NOW, this 24th day of September, 2003, upon consideration of Plaintiffs' complaint and of Defendant's counterclaim, following a nonjury trial, and for the reasons stated in the accompanying opinion, the court finds (a) in favor of Plaintiffs and against Defendant in his capacity as executor of the estate of Mary Jane Gross on Plaintiffs' complaint, and (b) in favor of Plaintiffs and against Defendant on Defendant's counterclaim, and it is accordingly ordered and directed as follows: 1. Defendant is ejected from the premises situated at 3525 Carlisle Pike, Camp Hill, Hampden Township, Cumberland County, Pennsylvania; 2. Damages are awarded to Plaintiffs in the amounts of a. Costs of suit; b. Attorney's fees of $16,485.00; c. Plumbing expenses of $250.00; and d. Rental value of the withheld premises at the rate of $350.00 per month from November 23, 1998, plus interest at the legal rate; 3. Subject to any setoff necessary to accommodate the above award to Plaintiffs, sums due, including interest, from Plaintiffs on the purchase price according to the terms of the agreement of sale between Defendant's decedent as seller and Plaintiffs as buyers shall be paid to the Estate of Mary Jane Gross or her devisee; and 4. No other relief is afforded to either party. BY THE COURT, William L. Adler, Esq. 125 Locust Street P.O. Box 11933 Harrisburg, PA 17108 Attorney for Plaintiffs William C. Dissinger, Esq. 28 N. 32nd Street Camp Hill, PA 17011 Attorney for Defendant J. Wesley Oler, Jr., J. ~rc