Carol N. Upchurch, individually and as of the Estate of Michael W. Upchurch v. David Upchurch and Jason Upchurch ( 2023 )

Rel: April 7, 2023
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
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SUPREME COURT OF ALABAMA
OCTOBER TERM, 2022-2023
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Carol N. Upchurch, individually and as executor of the Estate of
Michael W. Upchurch, deceased
v.
David Upchurch and Jason Upchurch
Appeal from Talladega Circuit Court
(CV-20-900314)
COOK, Justice.
Michael W. Upchurch, his brother David Upchurch, and his nephew
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Jason Upchurch owned several pieces of real property as joint tenants
with the right of survivorship. They signed a contract to sell the
properties to third parties. However, before closing, Michael died. In
this declaratory-judgment action, Michael's widow Carol N. Upchurch,
individually and as the executor of Michael's estate, asserted, among
other things, a claim to one-third of the proceeds from that sale. David
and Jason filed a motion for a summary judgment, which the Talladega
Circuit Court granted. We hold that, under the circumstances, Michael,
David, and Jason's decision to enter into a contract to sell the properties
severed their joint tenancy and that, as a result, Michael's estate is
entitled to one-third of the proceeds from the sale of properties. We
therefore reverse the trial court's judgment and remand the cause for the
entry of a judgment consistent with this opinion.
Facts and Procedural History
By virtue of three separate deeds, Michael, David, and Jason
acquired several pieces of real property in Talladega ("the Talladega
properties"), upon which Michael and Jason operated a business known
as Talladega Cycle Sales, Inc. All three deeds expressly stated that the
three men held the Talladega properties "for and during their joint lives,
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and upon the death of either of them, then to the survivor of them, in fee
simple, together with every contingent remainder and right of reversion."
Several years after Michael, David, and Jason obtained the
Talladega properties, Michael married Carol. No adjustments were made
to the deeds in light of Michael's marriage to Carol.
On March 13, 2020, Michael, David, and Jason entered into a real-
estate sales contract ("the land sale contract") to sell the Talladega
properties to John Crawford and Matthew Crawford. 1 At the time, it was
agreed that Michael, David, and Jason would receive $5,000 as
consideration, to be paid upon execution of the contract -- i.e., before
closing. The land sale contract stated, in pertinent part:
"The parties agree the closing of this transaction shall take
place on or before 5-13-2020. Purchasers shall not be entitled
to possession of said property prior to closing. Purchasers
further understand and agree Sellers shall be allowed to
continue to advertise the real estate for sale and make the
property available for inspection by other prospective
purchasers until this transaction is closed and in the event
this transaction is not closed on or before 5-13-2020 the
Sellers shall be free to enter into a [sic] agreement to sell said
property to another party. In that event, Purchasers' earnest
money shall be refunded to them and Purchasers will execute
1There was also a second contract, pursuant to which Michael and
Jason agreed to sell Talladega Cycle Sales, Inc., to the Crawfords.
Although the proceeds from that sale were also a subject of the litigation
below, they are not at issue in this appeal.
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a cancellation of this agreement."
(Emphasis added.) The land sale contract did not mention the joint
tenancy between Michael, David, and Jason.
On April 30, 2020, less than a month before the parties to the land
sale contract were set to close on the sale of the Talladega properties,
Michael died. Michael's will was admitted to probate, and Carol was
named executor of his estate.
On September 4, 2020, Carol, individually and as the executor of
Michael's estate, filed a declaratory-judgment action against David and
Jason, alleging, among other things, that Michael's estate was owed one-
third of any proceeds obtained from the sale of the Talladega properties.
According to Carol, when Michael, David, and Jason entered into the land
sale contract with the Crawfords, their joint tenancy with the right of
survivorship was severed and they became tenants in common. As a
result, Carol contended, Michael's estate was entitled to a pro rata share
of the proceeds obtained from the sale of the Talladega properties, and
she asked the trial court to enter an order "directing that all proceeds
from the sale of the [Talladega properties] … be paid to the Clerk of this
Court pending further orders of this Court."
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That same day, the trial court granted that request in part and
ordered the closing attorney to pay one-third of the net proceeds from the
sale of the Talladega properties -- or $84,422.25 -- to the clerk of the trial
court once the sale was completed.
On September 16, 2020, the sale of the Talladega properties was
finalized; David and Jason each received checks for one-third of the
proceeds, totaling $84,422.24 each. A check for Michael's one-third
interest was then deposited with the trial-court clerk.
Following additional filings and proceedings, each side filed a
motion for summary judgment. In their joint summary-judgment motion,
David and Jason argued that the deeds granting Michael, David, and
Jason each a one-third ownership interest in the Talladega properties
specifically stated that they owned the properties "for and during their
joint lives, and upon the death of either of them, then to the survivor of
them, in fee simple" and that the execution of the land sale contract did
not work to sever the joint tenancy with the right of survivorship created
by the deeds. In support of their motion, David and Jason attached copies
of the three deeds related to the Talladega properties.
In her summary-judgment motion, Carol argued that the execution
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of the land sale contract acted to sever Michael, David, and Jason's joint
tenancy with the right of survivorship and converted their interests into
a joint tenancy in common. Accordingly, she argued that one-third of the
proceeds from the sale of the Talladega properties was required to be paid
to Michael's estate. In support of her motion, Carol attached, among other
things, copies of the three deeds and the land sale contract.
On November 1, 2021, the trial court held a hearing on the motions
for a summary judgment. About a month later, the trial court entered a
judgment granting David and Jason's summary-judgment motion and
denying Carol's summary-judgment motion. Shortly thereafter, Carol
filed a postjudgment motion to alter, amend, or vacate the trial court's
judgment, which was subsequently denied. Carol then filed a timely
notice of appeal.
Standard of Review
" ' "This Court's review of a summary
judgment is de novo. Williams v. State Farm Mut.
Auto. Ins. Co., 886 So. 2d 72, 74 (Ala. 2003). We
apply the same standard of review as the trial
court applied. Specifically, we must determine
whether the movant has made a prima facie
showing that no genuine issue of material fact
exists and that the movant is entitled to a
judgment as a matter of law. Rule 56(c), Ala. R.
Civ. P.; Blue Cross & Blue Shield of Alabama v.
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Hodurski, 899 So. 2d 949, 952-53 (Ala. 2004). In
making such a determination, we must review the
evidence in the light most favorable to the
nonmovant. Wilson v. Brown, 496 So. 2d 756, 758
(Ala. 1986). Once the movant makes a prima facie
showing that there is no genuine issue of material
fact, the burden then shifts to the nonmovant to
produce 'substantial evidence' as to the existence
of a genuine issue of material fact. Bass v.
SouthTrust Bank of Baldwin County, 538 So. 2d
794, 797-98 (Ala. 1989); Ala. Code 1975, § 12-21-
12. '[S]ubstantial evidence is evidence of such
weight and quality that fair-minded persons in the
exercise of impartial judgment can reasonably
infer the existence of the fact sought to be proved.'
West v. Founders Life Assur. Co. of Fla., 547 So.
2d 870, 871 (Ala. 1989)." '
"Prince v. Poole, 935 So. 2d 431, 442 (Ala. 2006) (quoting Dow
v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala.
2004))."
Brown v. W.P. Media, Inc., 17 So. 3d 1167, 1169 (Ala. 2009).
Discussion
On appeal, Carol maintains that the execution of the land sale
contract acted to sever Michael, David, and Jason's joint tenancy with
the right of survivorship and converted their interests into a tenancy in
common. Accordingly, she argues that one-third of the proceeds from the
sale of the Talladega properties is required to be paid to Michael's estate
for distribution to his heirs. David and Jason contend, however, that,
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because the language of the land sale contract did not manifest an intent
to sever the joint tenancy with the right of survivorship and because
there is no evidence that either of them attempted to unilaterally destroy
the joint tenancy before Michael's death, they -- as the remaining
survivors of the joint tenancy -- are the ones who are entitled to the
disputed one-third of the proceeds.
Section 35-4-7, Ala. Code 1975, addresses survivorship between
joint tenants and provides:
"When one joint tenant dies before the severance, his
interest does not survive to the other joint tenants but
descends and vests as if his interest had been severed and
ascertained; provided, that in the event it is stated in the
instrument creating such tenancy that such tenancy is with
right of survivorship or other words used therein showing
such intention, then, upon the death of one joint tenant, his
interest shall pass to the surviving joint tenant or tenants
according to the intent of such instrument. This shall include
those instruments of conveyance in which the grantor conveys
to himself and one or more other persons and in which
instruments it clearly appears that the intent is to create such
a survivorship between joint tenants as is herein
contemplated."
This Court has previously explained:
" 'An estate in joint tenancy is one held by
two or more persons jointly, with equal rights to
share in its enjoyment during their lives, and
having as its distinguishing feature the right of
survivorship. Because of this right of survivorship,
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upon the death of a joint tenant, the entire estate
goes to the survivor or, in the case of more than
two joint tenants, to the survivors, and so on to the
last survivor. The estate passes free and exempt
from all charges made by the deceased cotenant or
cotenants.'
"20 Am. Jur. 2d Cotenancy and Joint Ownership § 4 (2015)
(footnotes omitted)."
Ex parte Arvest Bank, 219 So. 3d 620, 628 (Ala. 2016).
However, a joint tenancy with the right of survivorship may be
severed or destroyed by an act of one or more of the tenants that is
inconsistent with the continuation of the joint tenancy. 1 Jesse P. Evans
III, Alabama Property Rights and Remedies § 3.14[d][x] (5th ed. 2012).
Acts inconsistent with the continuation of a joint tenancy with the right
of survivorship include the disruption of any one of the required three
unities -- title, interest, and possession -- such as through the sale of the
property for a division of proceeds. 2 Id.
2We note briefly that, at common law, "a joint tenancy could be
created only where the four unities of time, title, interest, and possession
were present and the destruction of any of these would terminate the
joint tenancy." Nunn v. Keith, 289 Ala. 518, 521, 268 So. 2d 792, 794
(1972). However, the purpose and effect of § 35-4-7, Ala. Code 1975, and
its predecessors was to eliminate the requirement that one of the four
unities -- time -- exist in order to create such an estate; thus, only the
three unities listed above are now required. See 289 Ala. at 523, 248 So.
2d at 797.
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" '[W]hen the vendee contracts to buy and the vendor to sell,
though legal title has not yet passed, in equity the vendee
becomes the owner of the land, the vendor of the purchase
money. In equity the vendee has a real interest and the vendor
a personal interest. Equity treats the executory contract as a
conversion, whereby an equitable interest in the land is
secured to the purchaser for whom the vendor holds the legal
title in trust. This is the doctrine of equitable conversion.
" 'By the doctrine of equitable conversion under an
executory contract of sale, the equitable estate, in its entirety,
passes immediately to the purchaser at the moment the
contract becomes effective and the bare legal title for security
purposes remains in the vendor. The purchaser of the land is
looked on and treated as the owner thereof, and the vendor,
though holding the legal title, holds it as a trustee for the
purchaser, and the vendee holds the purchase money in trust
for the vendor....' (Footnotes omitted.)"
Grass v. Ward, 451 So. 2d 803, 805 (Ala. 1984) (quoting 8A G. Thompson,
Commentaries on the Modern Law of Real Property § 4447) (emphasis
added). See also Hudson v. Hudson, 701 So. 2d 13, 15 (Ala. Civ. App.
1997) (recognizing the same).
This Court has previously held that, in Alabama, when all the joint
tenants agree to sell their property to a third party, their joint tenancy
with the right of survivorship is automatically is severed. See Swan v.
Magnusson, 418 So. 2d 844, 845 (Ala. 1982) (recognizing that a husband
and wife's sale of their home to a third party "effectively destroyed the
joint ownership with rights of survivorship"). More recently, this Court
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has explained that an agreement providing for the eventual sale of a piece
of real property evinces an intent to no longer hold the property in joint
tenancy from the effective date of the agreement and, thus, not only
severs such a joint tenancy but also creates a tenancy in common. See
Fitts v. Stokes, 841 So. 2d 229, 232 (Ala. 2002) (holding that the property
settlement between a husband and wife that was incorporated into their
divorce judgment extinguished their joint tenancy with the right of
survivorship and created a tenancy in common); Kirven v. Reynolds, 536
So. 2d 936, 938 (Ala. 1988) (recognizing that "the parties themselves, or
the court with the parties before it, may terminate the estate, the
termination resulting in the creation of a tenancy in common without a
right of survivorship"); and Watford v. Hale, 410 So. 2d 885, 886 (Ala.
1982) (recognizing that an " 'agreement provid[ing] for the ultimate sale
of the property and the division of the proceeds … evinces the intent to
no longer hold the property in joint tenancy from the effective date of the
agreement' ") (quoting Mann v. Bradley, 188 Colo. 392, 395, 535 P.2d 213,
215 (1975))). 3
3AsDavid and Jason note, there is a split of authority on this issue
nationally. Some courts, including those in Alabama, have adopted the
view that a contract of sale entered into by all the joint tenants with a
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Carol argues that, by entering into the land sale contract with the
Crawfords, Michael, David, and Jason evinced a clear intent to no longer
hold the Talladega properties as joint tenants with the right of
survivorship. In support of that contention, Carol relies on this Court's
decision in Watford. In that case, a husband and wife acquired title to
certain real property as joint tenants with the right of survivorship. They
later divorced, and their divorce judgment incorporated a property-
third party severs or terminates the joint tenancy, absent evidence to the
contrary. See, e.g., Parker v. Parker, 434 So. 2d 1361, 1362 (Miss. 1983)
(holding that a joint tenancy is severed when the parties enter into a valid
contract containing provisions inconsistent with the joint tenancy); and
Kozacik v. Kozacik, 157 Fla. 597, 602, 26 So. 2d 659, 662 (1946) (holding
that a contract of sale is sufficient to terminate a joint tenancy). See also
Smith v. Morton, 29 Cal. App. 3d 616, 106 Cal. Rptr. 52 (1972); In re
Estate of Bates, 492 N.W.2d 704, 706 (Iowa Ct. App. 1992); Buford v.
Dahlke, 158 Neb. 39, 44, 62 N.W.2d 252, 255 (1954); McKissick v.
McKissick, 93 Nev. 139, 148, 560 P.2d 1366, 1371 (1977); and
Yannopoulos v. Sophos, 243 Pa. Super. 454, 459, 365 A.2d 1312, 1314
(1976). Others have concluded that such a contract of sale does not sever
or terminate a joint tenancy or a tenancy by the entirety absent
additional evidence of intent to sever. See, e.g., Weise v. Kizer, 435 So. 2d
381 (Fla. Dist. Ct. App. 1983); Doran v. Nally, 10 Mass. App. Ct. 893, 409
N.E.2d 1321 (1980); Field v. Field, 130 Misc. 2d 751, 497 N.Y.S.2d 586(Sup. Ct. 1985); and Wonka v. Cari, 249 Wis. 2d 23, 637 N.W.2d 92 (Ct.
App. 2001). See, generally, Sara L. Johnson, Annotation, Contract of Sale
or Granting of Option to Purchase, to Third Party, by Both or All of Joint
Tenants or Tenants by Entirety As Severing Or Terminating Tenancy,
39 A.L.R. 4th 1068 (1985 & Supp. 2018) (collecting cases addressing this
issue from other jurisdictions).
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settlement agreement, which stated, in pertinent part:
" '(c) The property owned jointly by the parties hereto
and located in Marengo County, Alabama, containing 200
acres more or less, shall be sold upon the agreement of both
parties. The proceeds of any sale of the above real estate shall
be divided equally among said parties. Until such time as the
above property is sold, plaintiff and defendant agree to each
pay one-half of the mortgage payments to the State Bank of
Sweetwater, Alabama, as the same become due. Each party
also agrees to pay one-half of any other expense relating to
said property, including but not limited to payments for taxes,
insurance, and maintenance of said property.' "
410 So. 2d at 885. The judgment therefore ordered each party to pay one-
half of the mortgage payments and other expenses relating to the
property " '[u]ntil such time as the ... property is sold.' " Id. Four years
later, the husband died intestate, and neither party had taken any action
toward selling the property. The wife initiated a declaratory-judgment
action against the husband's heirs-at-law and next of kin, claiming that,
as the surviving joint tenant, she held the property in fee simple. The
defendants claimed that the divorce judgment incorporating the
property-settlement agreement had destroyed the joint tenancy with the
right of survivorship and had converted the ownership of the property to
a tenancy in common.
The trial court held that the husband and wife's intention had been
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to " 'divide the property and create a tenancy in common,' " as indicated
by their property-settlement agreement that had been made a part of
their divorce judgment and that, therefore, the joint tenancy with the
right of survivorship had terminated. Id. at 886. As a result, the trial
court held that the husband's heirs-at-law and next of kin were the lawful
holders of the husband's interest in the property.
This Court, in a per curiam opinion, agreed and held that the
property-settlement agreement incorporated into the divorce judgment
evidenced an intention to sever the joint tenancy with the right of
survivorship. This Court explained:
" 'The intent of the parties as shown in the property
settlement agreement is central to the issue presented. This
agreement provided for the ultimate sale of the property and
the division of the proceeds, which evinces the intent to no
longer hold the property in joint tenancy from the effective
date of the agreement. The entire tenor of those provisions of
the agreement pertaining to this property is inconsistent with
any purpose of the parties to continue the right of
survivorship, which is the sine qua non of joint tenancy.' "
Id. (quoting Mann, 188 Colo. at 395, 535 P.2d at 215).
According to Carol, the land sale contract in this case, like the
property-settlement agreement in Watford, provided for the sale of the
Talladega properties and "the payment of the proceeds to the three sellers
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who executed it 'which evinces the intent to no longer hold the
propert[ies] in joint tenancy from the effective date of the agreement.' "
Carol's brief at 9 (quoting Watford, 410 So. 2d at 886). She further
contends that the " 'entire tenor of [the] provisions of the [land sale
contract] pertaining to [the Talladega] propert[ies] is inconsistent with
any purpose of the parties to continue the right of survivorship, which is
the sine qua non of joint tenancy.' " Carol's brief at 9-10 (quoting Watford,
410 So. 3d at 886.)
David and Jason contend that Watford is inapplicable because, they
assert, in that case the parties, in contemplation of divorce, entered into
a property-settlement agreement that specifically stipulated that the
property owned jointly by them with the right of survivorship would be
sold at a later date and that the proceeds would be divided equally
between them. According to David and Jason, the execution of such an
agreement as part of a divorce settlement will sever a joint tenancy with
the right of survivorship between divorcing parties. They contend,
however, that, by its own terms, the land sale contract in the present case
did not act as a conveyance but, instead, acted as an agreement to convey
the Talladega properties at a later date.
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In support of their contention, David and Jason point to the fact
that the land sale contract allowed for them and Michael "to continue to
advertise the real estate for sale and make the property available for
inspection by other prospective purchasers until this transaction is
closed" and also gave them the option to sell the Talladega properties to
another purchaser in the event the closing did not occur by May 13, 2020.
They further point out that, per the terms of the land sale contract,
Michael, David, and Jason also had no obligation to convey the Talladega
properties to the Crawfords if they defaulted.
However, under the legal principles discussed above, by virtue of
entering into the land sale contract with the Crawfords, Michael, David,
and Jason evinced an intent to sever the joint tenancy between them.
Further, additional evidence supports this conclusion about the intent to
sever. The land sale contract made no mention of maintaining the joint
tenancy with the right of survivorship between Michael, David, and
Jason if any of the events described in the preceding paragraph occurred.
It would be illogical to conclude that Michael, David, and Jason intended
for their joint tenancy to continue once the land sale contract and the
agreement to sell the business on the Talladega properties were executed.
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See note 1, supra. Moreover, under the land sale contract, the Crawfords,
as the purchasers of the Talladega properties were " 'looked on and
treated as the owner thereof,' " with Michael, David, and Jason, as the
"vendors," merely holding the properties " 'as … trustee[s] for the
purchaser[s].' " Grass, 451 So. 2d at 805.
Under these circumstances, the joint tenancy with the right of
survivorship between Michael, David, and Jason was severed and
became a tenancy in common. This Court has stated that the "major
distinction between a tenancy in common and a joint tenancy is that the
interest held by tenants in common is devisable and descendible, whereas
the interest held by joint tenants passes automatically to the last
survivor." Porter v. Porter, 472 So. 2d 630, 632 (Ala. 1985). Having
established that a tenancy in common existed at the time of Michael's
death and at the time the Talladega properties were sold, Michael's
estate was entitled to one-third of the proceeds from the sale,
representing Michael's interest in the properties.
Conclusion
Because Michael, David, and Jason entered into the land sale
contract for the purpose of selling the Talladega properties, which they
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owned as joint tenants with the right of survivorship, the evidence
indicates that they intended to sever their joint tenancy. Therefore, their
joint tenancy was converted into a tenancy in common, thereby entitling
Michael's estate to one-third of the proceeds from the sale of the
Talladega properties. We, therefore, reverse the trial court's judgment
granting David and Jason's summary-judgment motion and denying
Carol's summary-judgment motion, and we remand the cause for the trial
court to enter a judgment consistent with this opinion.
REVERSED AND REMANDED.
Parker, C.J., and Wise, Sellers, and Stewart, JJ., concur.
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