Ashworth v. Bullock , 732 Utah Adv. Rep. 5 ( 2013 )

2013 UT App 96_________________________________________________________
THE UTAH COURT OF APPEALS
SAM ASHWORTH,
Plaintiff and Appellant,
v.
MURPH BULLOCK,
Defendant and Appellee.
Opinion
No. 20120278‐CA
Filed April 18, 2013
Fourth District, American Fork Department
The Honorable Christine S. Johnson
No. 110100316
James H. Deans, Attorney for Appellant
Sidney Balthasar Unrau, Attorney for Appellee
JUDGE CAROLYN B. MCHUGH authored this Opinion, in which
JUDGES GREGORY K. ORME and J. FREDERIC VOROS JR. concurred.
McHUGH, Judge:
¶1 Sam Ashworth appeals the trial court’s declaratory
judgment determining that Murph Bullock and his wife Cecelia
Bullock (collectively, the Bullocks) are the owners of real property
in Payson, Utah (the Property). We affirm.
Ashworth v. Bullock
BACKGROUND1
¶2 In 1976, Joseph Bates and Rosemary Bates Harris, brother
and sister, held the Property as joint tenants, with right of
survivorship. The Bullocks were living in a home located on the
Property pursuant to a verbal rental agreement with Bates. The
Bullocks had never met Harris and were unaware that she held an
ownership interest in the Property.
¶3 On October 15, 1976, Bates executed a written document (the
Writing), which states,
I Joe Bates am selling my home.
at 346 [West] 300 [South] Payson[, U]tah.
To Murph and Cece Bullock
For $84,000[.]00 to be paid $200.00
a month until the year 2013.
where for it will be paid in full.
10/15/1976 /s/ Joe Bates
witness /s/ Woody Woodward
Bates read the Writing aloud to Murph Bullock, who is functionally
illiterate, and then signed it. However, Harris never signed the
Writing and neither the Bullocks nor Bates ever recorded the
Writing or any other document indicating that the Bullocks claimed
an interest in the Property. In May 1977, nearly seven months after
Bates executed the Writing, Harris died.
¶4 The Bullocks still reside on the Property and have made the
monthly payments specified in the Writing for over thirty years.
The Bullocks have also contributed $800 each year to the property
1. “‘On appeal from a bench trial, we view the evidence in a light
most favorable to the trial court’s findings, and therefore recite the
facts consistent with that standard.’” Alvey Dev. Corp. v.
Mackelprang, 2002 UT App 220, ¶ 2, 51 P.3d 45 (quoting Johnson v.
Higley, 1999 UT App 278, ¶ 2, 989 P.2d 61).
20120278‐CA 2 2013 UT App 96Ashworth v. Bullock
taxes. However, title to the Property remained in Bates’s name and
the Bullocks have never claimed a tax deduction related to the
Property. The Bullocks have maintained renter’s insurance on the
residence rather than an owner’s insurance policy, but they have
made significant repairs and improvements to the Property.
¶5 When Bates died in October 2010, Ashworth was appointed
as the personal representative of the estate. Assuming that the
Property was part of the estate, Ashworth instructed a property
manager to contact the Bullocks for the purpose of obtaining a
written rental agreement. The Bullocks refused to enter into a
rental agreement, instead claiming that they were purchasing the
Property from Bates.
¶6 On May 2, 2011, Ashworth filed a complaint against Murph
Bullock for unlawful detainer. Bullock responded with an answer
and a motion to dismiss the complaint. At a hearing on the motion
to dismiss, the parties stipulated that the motion be denied and that
the matter be set for a bench trial. At trial, Ashworth indicated that
the estate no longer sought eviction under the unlawful detainer
statute. Instead, the estate requested a declaratory judgment
“regarding the rights of the parties with respect to the Property.”
The trial court ruled that Ashworth’s motion was appropriate
because the evidence at trial “focused on the issue of determining
the nature of the agreement between Bates and the Bullocks.”
Accordingly, the trial court conformed the pleadings to the
evidence and rendered a declaratory judgment on the effect of the
Writing.
¶7 The trial court first ruled that “Harris’ signature was
unquestionably necessary on the [Writing] when it was executed
in 1976.” As a result, it determined that the Writing had not
ripened into a contract at the time it was executed. However, the
trial court also concluded that “upon Harris’ death, the [Writing]
20120278‐CA 3 2013 UT App 96Ashworth v. Bullock
ripened into what can be argued is an enforceable contract.”2
Accordingly, the trial court ruled that the Bullocks had purchased
the Property and that Ashworth was not entitled to relief under the
unlawful detainer statute. Ashworth filed a timely appeal.
ISSUE AND STANDARD OF REVIEW
¶8 Ashworth argues that the Writing attempting to sell the
Property to the Bullocks is void and unenforceable under the
statute of frauds and therefore conveyed nothing to the Bullocks.
“The applicability of the statute of frauds is a question of law to be
reviewed for correctness.” Bennett v. Huish, 2007 UT App 19, ¶ 25,
155 P.3d 917 (citation and internal quotation marks omitted).
ANALYSIS
¶9 Ashworth agrees with the trial court that the Writing was
void and unenforceable under the statute of frauds when executed
by Bates. However, he contends that the trial court erred in
concluding that the Writing ripened into an enforceable contract
upon Harris’s death. In order to resolve this issue, we must
consider the effect of the Writing and Harris’s death on the
ownership of the Property.
I. The Writing Was Not an Enforceable Contract when Executed
by Bates.
¶10 The trial court correctly noted that “Utah courts have, over
the years, consistently determined that the Statute of Frauds
2. The trial court’s equivocation that the Writing is “arguably” a
contract was due to an additional argument advanced by
Ashworth that the Writing was too indefinite to create a contract.
The trial court ultimately resolved that issue in favor of the
Bullocks, and Ashworth has not appealed that determination.
20120278‐CA 4 2013 UT App 96Ashworth v. Bullock
requires the signature of both owners for the transfer of real
property held in joint tenancy.”3 See, e.g., Krantz v. Holt, 819 P.2d
352, 353 (Utah 1991) (“If [ex‐husband] retained a joint interest in the
property, his written consent to the property’s sale would be
necessary, not because of any clause in the agreement, but because
the Utah statute of frauds so requires.”); Williams v. Singleton, 723
P.2d 421, 423 (Utah 1986) (per curiam) (“One joint tenant or tenant
in common cannot bind his cotenant by a contract which he may
make relating to the common property.”); Centennial Inv. Co. v.
Nuttall, 2007 UT App 321, ¶ 10, 171 P.3d 458 (“[W]hen real
property is held in joint tenancy, the signature of both owners is
necessary to satisfy the Utah statute of frauds.”). In this case, Harris
did not execute the Writing and therefore, no enforceable contract
was formed in 1976. See Krantz, 819 P.2d at 353; Williams, 723 P.2d
at 423; Centennial Inv., 2007 UT App 321, ¶ 10.
II. The Writing Did Not Sever the Joint Tenancy.
¶11 The status of the joint tenancy at the time of Harris’s death
is relevant because it determines who became the owner of Harris’s
interest in the Property. If the joint tenancy remained in effect at
that time, Harris’s interest passed by law to Bates. See generally
Shiba v. Shiba, 2008 UT 33, ¶ 17, 186 P.3d 329 (holding that both
parties to a joint tenancy “hold a concurrent ownership in the same
3. Utah’s statute of frauds provides,
No estate or interest in real property, other than
leases for a term not exceeding one year, nor any
trust or power over or concerning real property or in
any manner relating thereto, shall be created,
granted, assigned, surrendered or declared otherwise
than by act or operation of law, or by deed or
conveyance in writing subscribed by the party
creating, granting, assigning, surrendering or
declaring the same, or by his lawful agent thereunto
authorized by writing.
Utah Code Ann. § 25‐5‐1 (LexisNexis 2007).
20120278‐CA 5 2013 UT App 96Ashworth v. Bullock
property with a right of survivorship, i.e., each [tenant] is afforded
the eventuality of a full ownership interest, conditioned upon the
tenancy remaining unsevered, and one out‐living the other”
(citation and internal quotation marks omitted)); see also In re Estate
of Ashton, 898 P.2d 824, 826 (Utah Ct. App. 1995) (reversing the
district court’s inclusion of property in the deceased’s estate that,
at the time of his death, was held in joint tenancy with full right of
survivorship). If, on the other hand, Bates’s attempt to convey the
Property to the Bullocks severed the joint tenancy, he and Harris
held the Property as tenants in common at the time of Harris’s
death. See Utah Code Ann. § 57‐1‐5(5)(a) (LexisNexis Supp. 2012)
(“[I]f a joint tenant makes a bona fide conveyance of the joint
tenant’s interest in property held in joint tenancy to himself or
herself or another, the joint tenancy is severed and converted into
a tenancy in common.”). When a tenant in common dies, that
tenant’s interest in the property passes to her heirs, rather than to
the other tenants in common. See Webster v. Lehmer, 742 P.2d 1203,
1205 (Utah 1987) (explaining that the deed created a tenancy in
common, not a joint tenancy, and that therefore, “when [the tenant
in common] died intestate in 1975, her interest, instead of passing
solely to [the other tenant in common], passed by the rules of
intestate succession to [the deceased tenant’s] two daughters”).
Thus, if the Writing severed the joint tenancy, it was converted to
a tenancy in common and Harris’s interest passed to her heirs. See
Shiba, 2008 UT 33, ¶ 17.
¶12 When a joint tenant conveys “his interest therein by a valid
deed,” he “‘severs and terminates the joint tenancy by the creation
of a tenancy in common.’” Id. (quoting Tracy‐Collins Trust Co. v.
Goeltz, 301 P.2d 1086, 1090 (Utah 1956)). However, such a
conveyance by valid deed does not convey the entire property
because a joint tenant may not “dispose of more than his own
interest in joint tenancy property, i.e., one‐half thereof.” Id. (citation
and internal quotation marks omitted); see also Johnson v. Bell, 666
P.2d 308, 312 (Utah 1983) (“A grantee under a quitclaim deed
acquires only the interest of his grantor be that interest what it
may.” (citation and internal quotation marks omitted)); Crowther v.
20120278‐CA 6 2013 UT App 96Ashworth v. Bullock
Mower, 876 P.2d 876, 879–80 (Utah Ct. App. 1994) (holding that a
quitclaim deed of the mother’s one‐half interest in property
severed the joint tenancy and created a tenancy in common). Here,
Bates never executed a deed in favor of the Bullocks. In addition,
Ashworth concedes that Bates’s intent was to contract for the sale
of the entire Property, not just his half interest in it. See In re Estate
of Knickerbocker, 912 P.2d 969, 975 (Utah 1996) (“[T]he key to
determining whether a joint tenancy has been severed is the intent
of the parties.”); Williams, 723 P.2d at 425 (holding that one joint
tenant could not alone accept an offer to purchase property where
the “[buyers] offered to purchase the joint interest of the [sellers],
and [one joint tenant] negotiated for the sale of the joint interest”);
Centennial Inv., 2007 UT App 321, ¶ 12 (“[B]oth parties agree that
the negotiations were for the purchase of the joint interest of [the
joint tenants].”).
¶13 The Writing in this case indicates that Bates purported to
contract to sell the entire property, stating, “I Joe Bates am selling
my home.” See Utah Code Ann. § 57‐1‐3 (LexisNexis 2010) (“A fee
simple title is presumed to be intended to pass by a conveyance of
real estate, unless it appears from the conveyance that a lesser
estate was intended.”); Gold Mountain Dev., LLC v. Missouri Flat,
Ltd., 2005 UT App 276U, para. 13 (mem.) (Orme, J., concurring in
part, dissenting in part) (noting that the word “sell” is one that
“typically indicate[s] a conveyance of title rather than the
conveyance of a lesser estate”); cf. Crowther, 876 P.2d at 880(holding that the quitclaim deed unambiguously evidenced the
joint tenant’s intent to convey her “one‐half interest” and was
therefore effective to sever the joint tenancy). Because Bates
attempted to contract to sell the entire Property but could not
validly agree to convey more than his own joint interest, the
Writing did not ripen into a contract before Harris’s death. See
Williams, 723 P.2d at 425. As a result, it did not sever the joint
tenancy and Harris’s interest in the Property passed to Bates by
operation of law when she died.
20120278‐CA 7 2013 UT App 96Ashworth v. Bullock
III. The Writing Ripened into an Enforceable Contract.
¶14 Even though Ashworth is correct that the Writing did not
comport with the requirements of the statute of frauds in 1976, we
agree with the trial court’s determination that it became an
enforceable contract when Harris’s interest passed to Bates. In
reaching this conclusion, we find instructive the Utah Supreme
Court’s decision in Williams v. Singleton, 723 P.2d 421 (Utah 1986)
(per curiam). There, the buyers made an offer to purchase real
property held in joint tenancy by the sellers, a husband and wife.
Id. at 422. By its terms, the offer expired if not accepted in one day.
Id. The husband provided written authorization to the sellers’ real
estate agent to accept the offer on his behalf, but the wife did not
execute the authorization. Id. at 423. After the real estate agent
accepted the offer, the buyers decided not to purchase the property
and the sellers refused to return their $5,000 earnest money. Id. The
sellers sued, and the district court ruled in favor of the buyers,
despite the wife’s belated attempt to ratify the husband’s actions in
writing. Id. On appeal, the Utah Supreme Court held that no
enforceable contract had been formed because the husband could
not accept the buyers’ offer without written authorization from the
wife. Id. at 423–24; see also id. (“[A]n offer to purchase when
accepted creates an interest in real estate and is within the statute
of frauds.” (citations omitted)).
¶15 Of significance to the issue before us, the Williams court also
held that the wife’s attempt to ratify the husband’s acceptance in
writing was “ineffectual to revive the contract” because it was made
after the offer had expired according to the one‐day deadline. Id. at
424 (emphasis added) (citing Burg v. Betty Gay of Wash., Inc., 225
A.2d 85, 86 (Pa. 1966) (holding that ratification “must be in writing
and executed prior to any effective renunciation by [the other party
to the agreement]”)); see also Centennial Inv. Co. v. Nuttall, 2007 UT
App 321, ¶ 12, 171 P.3d 458 (holding that a Real Estate Purchase
Contract (REPC) executed by only one joint tenant never ripened
into a contract and therefore a subsequent REPC by which both
joint tenants agreed to convey the property to a third party did not
20120278‐CA 8 2013 UT App 96Ashworth v. Bullock
breach the prior REPC). By implication, our supreme court’s
analysis indicates that had the wife ratified within the deadline for
acceptance, the statute of frauds would have been satisfied and the
contract, which was initially void and unenforceable, would have
ripened into an enforceable contract.
¶16 In the present case, nothing occurred between Bates’s
execution of the Writing and his acquisition of fee title in the
Property to prevent it from ripening into a contract. By the terms
of the Writing and the parties’ practices, Bates was not expected to
convey title to the Property until 2013, when the Bullocks would
have paid in full. Before he was required to transfer title, Harris’s
interest passed to Bates, thereby giving him sole ownership of the
Property. Although the contract was unenforceable when originally
signed, Bates’s acquisition of full title “revived” it because Harris’s
signature was no longer necessary to satisfy the statute of frauds
and the Writing had not been repudiated. See Williams, 723 P.2d at
424.
¶17 Accordingly, we reject Ashworth’s argument that a contract
void and unenforceable under the statute of frauds cannot become
enforceable when the statutory defect is cured. Otherwise,
subsequent ratification by the joint tenant who had not previously
signed a real estate purchase contract would be irrelevant. Cf. id.
(determining that because the offer had expired, the wife’s attempt
to ratify and accept it was ineffectual to create a contract). We also
note that generally “a seller may make a valid contract to sell
property, though the seller has no legal title to the property, as long
as the seller has title when the time to convey arrives.” Utah Golf
Ass’n, Inc. v. City of N. Salt Lake, 2003 UT 38, ¶ 15, 79 P.3d 919; see
also Neves v. Wright, 638 P.2d 1195, 1197 (Utah 1981) (reiterating the
“fundamental rule that a seller need not have legal title during the
entire executory period of a real estate contract”); Corporation Nine
v. Taylor, 513 P.2d 417, 421 (Utah 1973) (“[T]he law does not require
the vendor to have clear and marketable title at all times during the
performance of his contract, and [he] is not ordinarily so obliged
until the time comes for him to perform.”). This rule is designed to
20120278‐CA 9 2013 UT App 96Ashworth v. Bullock
“enhance the alienability of real estate by providing necessary
flexibility in real estate transactions.” Neves, 638 P.2d at 1198. When
applying it, courts should scrutinize the facts carefully and seek to
“avoid unfairness, sharp practice, [or] outright dishonesty.” Id. In
this case, fairness dictates that the rule be applied.
¶18 Our supreme court has also instructed that the statute of
frauds “should be used for the purpose of preventing fraud and
not as a shield by which fraud can be perpetrated.” Jacobson v. Cox,
202 P.2d 714, 720 (Utah 1949). Ashworth’s position that Bates’s
estate is entitled to the Property despite Bates’s written attempt to
convey it to the Bullocks, the Bullocks’ thirty‐year performance of
the terms of the Writing, and Bates’s acquisition of the entire
Property before his performance was due under the contract,
would result in such a shield to Bates’s estate and be contrary to the
purposes of the statute of frauds.4
4. We note that some jurisdictions hold that this result is dictated
by their after‐acquired title statutes or common law concepts of
after‐acquired title. See, e.g., Hardigan v. Kimball, 553 A.2d 1265,
1266–67 (Me. 1989) (holding that a land sale contract executed by
one of two joint tenants was unenforceable when executed but
became effective by virtue of Maine’s doctrine of after‐acquired
title when the other joint tenant died and his interest passed to the
joint tenant who had executed the contract); Brousseau v. Brousseau,
927 A.2d 773, 778 n.2 (Vt. 2007) (J. Dooley, dissenting) (“Regardless
of whether [the other joint tenant’s] interest passed to mother by
right of survivorship or by will, mother subsequently obtained . . .
the right to convey the property free of any claim by [the other joint
tenant or that tenant’s] estate. Mother’s claim that [her grantee]
now only holds a quarter interest in the property, therefore is
defeated by the doctrine of after‐acquired title.”); Simon v. Chartier,
27 N.W.2d 752, 754 (Wis. 1947) (holding that, even if a contract for
the sale of land was void due to one joint tenant’s mental
incompetence at the time it was executed, it became enforceable
when that joint tenant died and his interest passed to the other joint
(continued...)
20120278‐CA 10 2013 UT App 96Ashworth v. Bullock
CONCLUSION
¶19 The Writing became an enforceable contract to sell the
Property to the Bullocks. Although Bates, as a joint tenant, did not
hold legal title at the time he executed the Writing, he held title in
fee simple absolute once he survived the other joint tenant. At that
point, the Writing had not expired or been repudiated, and Bates
had not yet been required to convey title. Therefore, the Writing
was no longer unenforceable under the statute of frauds.
¶20 Affirmed.
4. (...continued)
tenant, whose mental capacity at the time of execution was not in
dispute). Because we affirm on other grounds, we express no
opinion on the impact of Utah’s after‐acquired title statute to the
facts of this case. See generally Utah Code Ann. § 57‐1‐10
(LexisNexis 2010).
20120278‐CA 11 2013 UT App 96