To Err is Human … to Fix it is the Chancellor’s Job

June 19, 2013 § Leave a comment

Shelly Kelly wanted to rent a house in Greenville. She approached Harrison Barry, who owned some rental property. Instead of a rental, they struck a deal for Shelly to buy some property for $5,000.

Barry asked Edward Lueckenbach, a Greenville attorney, to prepare the deed, but he was not asked to do a title opinion. The attorney went to the Washington County Courthouse, where he got the legal description for “Lots 51 and 52” in Shelton Subdivision, and he prepared a warranty deed.

Kelly bought her property and moved in at 330 Lake Street.

Barry renovated the neighboring property at 332 Lake Street, converting it from a single-family dwelling into a boarding house. He paid for air-conditioning, painting, and plumbing work. He installed a new water heater, furnace, closet, door locks, and doors, including paying for all the necessary materials. Barry allowed Kelly to screen the tenants, based on a complaint she made about noise, and Kelly collected the rent, which she turned over to Barry.

When Kelly received a tax bill for the 332 property, she called Barry to inquire, and he went to the attorney’s office, who advised him that the Lots 51 and 52 on the deed were for two different dwelling houses, one at 330, and one at 332. The attorney contacted Kelly, who refused to sign a corrective quitclaim deed. Barry filed suit to have the deed reformed to reflect the actual intent of the parties, and the chancellor ruled in Barry’s favor. Kelly appealed.

In Kelly v. Barry, decided May 21, 2013, the COA affirmed. Judge Roberts’ opinion sets out the basis for the ruling:

¶12. “A deed may be reformed where it is shown to [have] result[ed] from the mutual mistake of the parties in contracting for it.” Olive [v. McNeal], 47 So. 3d at 739 (¶12) (citing Brown v. Chapman, 809 So. 2d 772, 774 (¶9) (Miss. Ct. App. 2002)). As stated in Brown:

The law permits reformation of instruments to reflect the true intention of the parties when . . . the erroneous part of the contract is shown to have occurred by a mutual mistake, i.e., the party seeking relief is able to establish to the court’s satisfaction that both parties intended something other than what is reflected in the instrument in question[.]

Brown, 809 So. 2d at 774 (¶9). “The party seeking reformation of a deed on a mistake theory bears the burden of proof beyond a reasonable doubt.” Olive, 47 So. 3d at 739-40 (¶13) (citing McCoy v. McCoy, 611 So. 2d 957, 961 (Miss. 1992)).

¶13. Kelly notes that in Olive, this Court affirmed a chancellor’s decision that a litigant had failed to demonstrate mutual mistake because: (1) the document at issue in Olive was titled as a warranty deed; (2) the grantor was literate; (3) the grantor had several opportunities to review the warranty deed; (4) the grantor had some experience in real-estate transactions; and (4) the grantor had an opportunity to discuss the warranty deed with his attorney. Olive, 47 So. 3d at 740 (¶17). Kelly argues that the circumstances in this case are similar to the circumstances in Olive. We disagree.

¶14. Without question, the document at issue in this case was styled as a warranty deed. However, the property description merely indicated that Kelly was acquiring “Lots 51 & 52.” The property description does not indicate that Barry was selling Kelly 330 Lake Street and 332 Lake Street. In preparing the warranty deed, Lueckenbach could have mistakenly believed that “Lots 51 & 52” both applied to a single street address. Barry testified that he did not read the property description. Even if he had, no portion of the property description would have placed him on notice that he was mistakenly transferring title of two separate street addresses.

¶15. Furthermore, Barry’s behavior after the transaction indicated that he believed he never transferred title to 332 Lake Street. He paid for substantial repairs to 332 Lake Street and converted it to a boarding house. And he continued to pay the utility bills, taxes, and insurance premiums that related to the property.

And Kelly collected the rent for Barry and turned it over to him.

Who among us has not had a similar experience? I know I had a scarily similar experience once in Neshoba County where I would have faced litigation at my expense to correct a misdeeded parcel, but for the intervention of a young attorney with a sense of honor and equity, who prevailed upon his client to agree to fix the screw-up that had been the mutual error of two attorneys who put haste ahead of accuracy in drafting the judgment and deeds necessary to settle an estate.

Cases like this one are at the very core of what chancery courts are for.

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