Carla E. Umland v. Lizabeth G. Graham

In the
Missouri Court of Appeals
Western District
CARLA E. UMLAND, )
)
Respondent, ) WD81994
)
v. ) OPINION FILED:
) November 19, 2019
LIZABETH G. GRAHAM, )
)
Appellant. )
Appeal from the Circuit Court of Clay County, Missouri
The Honorable Shane T. Alexander, Judge
Before Division Three: Alok Ahuja, Presiding Judge, Gary D. Witt, Judge and Anthony
Rex Gabbert, Judge
Appellant Lizabeth Graham ("Graham") appeals the judgment of the Circuit Court
of Clay County in an action to partition property held jointly with her partner, Carla
Umland ("Umland"). Graham alleges that the circuit court erred when it failed to properly
credit her for the down payment she made towards the purchase of the home, failed to
account for a period of time in which she was solely responsible for the payment of the
mortgage, and in finding the parties jointly responsible for the balance of a home equity
line of credit. We affirm.
Factual Background1
Graham and Umland began living together in the fall of 1994 at Graham's residence,
located at 8871 E. 52 Terr., Kansas City, Missouri ("8871 Property"). From the fall of
1995 until at least January 2016, they committed themselves to live together as a married
couple, including to emotionally and financially support one another, living together
through retirement until death. This included a proposal and exchange of rings, although,
at the time, the State of Missouri did not allow same-sex couples to marry. Beginning in
at least 1998, the parties began contributing both of their incomes into a joint bank account
from which their joint household and personal expenses were paid. Most of their joint
expenses, including the mortgage payment, utilities, and investments, were paid from the
joint account until it was closed by Graham in September 2016.
In January 1999, the couple purchased a residence, commonly known as 2301
Redbud Drive, Liberty, Clay County, Missouri ("Redbud Property"), titled to them as joint
tenants with the right of survivorship and subject to a mortgage in both of their names.
Graham contributed $50,000.00 to the down-payment on the property, which was derived
from the sale of the 8871 Property titled solely to Graham. The payments and obligations
secured by the Redbud Property were paid from joint earnings until at least 2013, when
Umland left her employment at Proctor and Gamble.
After Umland ceased working for Proctor and Gamble, the parties agreed that
Umland would form and operate two business entities, All Trades Home Maintenance and
1
"We view the evidence and all reasonable inferences from the evidence in the light most favorable to the
judgment." Holt v. Rankin, 320 S.W.3d 761 S.W.3d 761, 763 n. 3 (Mo. App. W.D. 2010).
2
Repair, LLC and Aden Fire and Safety, LLC. The businesses were solely owned by
Umland to shield the couple's joint assets, but they were to be operated for the couple's
joint benefit. The parties jointly obtained a home equity line of credit ("HELOC") to cover
the startup costs and business expenses. The HELOC was secured by a Second Deed of
Trust on the Redbud Property. The original credit limit on the HELOC was $90,000. Due
to business losses, the parties later increased this limit to $170,000. The businesses
ultimately proved to be unsuccessful. At the time the Redbud Property was sold the
HELOC was paid in full in the sum of $98,000.
The couple shared various other accounts held as joint tenants with the rights of
survivorship as well as bank accounts and retirement accounts held individually. They also
held title jointly to several motor vehicles and trailers. On September 19, 2002, Graham
and Umland entered into an "Estate Plan and Revocable Trust of Lizabeth G. Graham and
Carla E. Umland," which provided, among other things, that "all property subject to this
Trust during the joint lives of the Grantors shall be beneficially owned by them Tenants by
the Entirety." The division of these assets are not at issue in this appeal.2 Additionally, the
couple shared one daughter, an adult at the time of the trial.
The court entered its Judgment on May 10, 2018 ("Judgment"). After dividing all
of the assets, the trial court ordered Graham to pay Umland a payment of $272,005.00 in
order to equalize the division of assets. As relevant to this case, the court found that the
net proceeds from the sale of the Redbud Property should be divided equally between the
2
Because the division of these assets is not the subject of this appeal, we do not address whether unmarried
persons can legally attempt to title assets as tenants by the entirety. These assets were in fact held in the name of the
trust and divided pursuant to its terms.
3
parties. Further, the court found that the HELOC, which was secured by the Redbud
Property, was a joint debt for which both parties were equally responsible, and therefore,
was equally considered toward each party in the final division of the assets. This appeal
followed.
Standard of Review
"A partition action is a court tried action and is thus reviewed pursuant to
Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976)." Hoit v. Rankin, 320
S.W.3d 761, 765 (Mo. App. W.D.2010). "'[W]e will sustain the judgment of
the trial court unless there is no substantial evidence to support it, it is against
the weight of the evidence, or it erroneously declares or applies the law.'" Id.
(quoting Clark v. Dady, 131 S.W.3d 382, 386 (Mo. App. W.D.2004)). "We
defer to the trial court's findings of fact because of its superior ability to
assess the credibility of witnesses." Id.
Felderman v. Zweifel, 346 S.W.3d 386, 388 (Mo. App. W.D. 2011).
Discussion
In her sole point on appeal, Graham raises three allegations of error generally related
to the division of the net proceeds from the sale of the Redbud Property. The Redbud
Property was sold in 2017, during the pendency of these proceedings, resulting in
$145,315.88 net cash proceeds from the equity in the property.3 Graham alleges first that
the circuit court erred in failing to give her credit for a $50,000 down-payment she made
towards the purchase of the Redbud Property because this payment was derived from the
sale of Graham's home, the 8871 Property, in which Umland had no ownership interest.
Second, that the court erred in failing to give her credit for $36,918 in mortgage payments
3
By agreement of the parties to this action, the proceeds are held in counsel's trust account pending the
finality of this litigation. Originally there were additional parties to this action, who were dismissed by agreement of
the parties prior to trial and are not subject to this appeal.
4
that she made from May of 2013 until July of 2017, or at least credit her with the reduction
in the principal amount of the mortgage during this period because these payments were
made either after Umland was self-employed and not contributing to expenses or after the
relationship had ended. Third, that the court erred in failing to give Graham credit for the
$98,000 HELOC on the Redbud Property because the parties had agreed that Umland was
to be solely responsible for this debt.
As to the first two allegations of error, the circuit court found that Graham
demonstrated a donative intent in making the down-payment on the home and in making
these additional payments towards the mortgage. The Redbud Property was jointly
purchased by the parties, the property was titled in joint names and the mortgage was a
joint responsibility entered into by both parties. There is a presumption that, when a deed
is silent, co-tenants hold equal ownership shares in the property. Hoit v. Rankin, 320
S.W.3d 761, 772 (Mo. App. W.D. 2010). "[U]nequal contributions may be explained by
evidence that the co-tenant contributing a greater amount toward purchase intended the
disparity as an enforceable gift, a determination which may be influenced by evidence of
the nature of the relationship [between] the co-tenants." Felderman, 346 S.W.3d at 389
(quoting Hoit v. Rankin, 320 S.W.3d 761, 772 (Mo. App. W.D. 2010)). "Evidence of a
relationship between co-tenants suggestive of donative intent is relevant evidence. . . ." Id.
In Felderman, the defendant purchased a property and then invited his ex-wife to
move to Missouri and live with him on the property. Felderman, 346 S.W.3d at 388.
Following the move, the defendant executed a Warranty Deed to himself and his ex-wife
as joint tenants with the right of survivorship. Id. The defendant testified at trial that his
5
ex-wife had paid nothing for the property, and when he executed the deed, he did so with
the understanding that she would sell a property she owned in New Mexico and pay for
half of the original purchase price, although ultimately she paid nothing and had "very
little, if any, money invested" in the property. Id. at 389. The court, however, found the
defendant had invited his ex-wife to come and live on the property and that he had promised
her that he would deed half of the property to her. Id. at 390. The couple cohabitated on
the property for eighteen months. Id. The circuit court found ex-wife's testimony more
credible on the issue of donative intent, and this Court deferred to that determination. Id.
Accordingly, this Court affirmed the circuit court's finding of donative intent and a joint
tenancy interest, despite ex-wife having made little, if any, contribution to the property. Id.
In this case, the relationship between the parties was significantly stronger than that
in Felderman. Both Umland and Graham testified that they lived together in a marriage-
like relationship for several years prior to the sale of the 8871 Property and the purchase of
the Redbud Property. The couple gave birth to a child4 the same year that they sold the
8871 Property and purchased the Redbud Property. They opened a joint bank account, and
Graham would pick up paychecks for both she and Umland and deposit the checks in the
joint account. That joint account was used to pay household expenses including the
mortgage secured by the 8871 Property. While Graham owned the 8871 Property prior to
the relationship and it was titled in her name individually, Umland testified that she was
responsible for substantial renovations to the home including removing and installing new
4
Umland gave birth to a daughter by artificial insemination in 1998. Graham could not legally adopt the
child at the time of her birth but did so in 2008, when it became legal for same sex couples to adopt in the State of
Missouri.
6
carpeting, tiling the basement, installing sinks and faucets, painting both the interior and
exterior of the home, and ultimately preparing the house to be sold. Umland testified the
8871 Property was sold for approximately $90,000, and there was approximately $30,000
left on the mortgage. Graham believed the net profit from the sale of the 8871 Property
was between $50,000 and $55,000. Graham took $50,000 of the net proceeds and placed
a down-payment on the Redbud Property. According to Umland's testimony, there was no
discussion that the $50,000 would be returned if the relationship failed while Graham
testified that she said at the time, "[i]f anything happens" she wanted the $50,000 down-
payment back. Umland testified that with respect to the ownership of the Redbud Property
"[w]e discussed it would be equal. Everything was equal."
In contrast to Felderman, Graham cites to several cases where the court, in dividing
the property, did just what Graham advocates, allocated proceeds of the sale of real estate
based on the percentage of each parties contribution. For example, Graham relies on
Williams v. Williams, 990 S.W.2d 665 (Mo. App. E.D. 1999). In Williams, husband and
wife were divorced in 1973, but the marital home was not divided by the divorce decree.
Id. at 667. Wife resided in the home, and nearly 24 years after the divorce, husband brought
a partition action to partition the property. Id. The trial court found that husband's failure
to seek a remedy until 24 years after the divorce and 11 years following a modification of
the divorce decree was patently unfair to wife and granted wife the entirety of the marital
home. Id. at 668. On appeal, the Eastern District of this Court found that the judgment
improperly denied husband his interest in the property and remanded the case for the trial
court to determine the respective contributions made to the home.
7
Each party begins with a half of a share in the property in the trial court's
initial calculation of individual interest. Vickers v. Vickers, 762 S.W.2d 482,
483 (Mo. App. E.D.1988). However, under the dictates of Brooks [v. Kunz,
637 S.W.2d 135, 139-40 (Mo. App. E.D. 1982)], if one co-tenant
disproportionately augments the value of the property, that co-tenant is
entitled to contribution from the other. Id.
Williams, 990 S.W.2d at 668. This discussion from Williams represents the proper partition
of the property where there is no evidence of donative intent. In Montgomery v. Roberts,
714 S.W.2d 234, 235 (Mo. App. E.D. 1986), also cited by Graham, landowner's sister filed
a petition to quiet title after property owner's death. The landowner had previously
transferred the property to a woman5 he was living with at the time of his death. Id. The
court found that "[s]ince there was no evidence of donative intent on [landowner's] part, or
the existence of a family relationship, the property had to be apportioned according to the
contribution of each towards the acquisition of the property." Id. 236.
Montgomery makes clear that donative intent and family relationship do factor into
a courts consideration in the apportionment of property. As with Felderman, the nature of
Graham and Umland's relationship was sufficient to support the circuit court's finding that
Graham had a donative intent when she made the down-payment for the jointly titled home
as well as made additional payments toward the principle. Umland testified that the
extensive renovations that she made to the 8871 Property increased its value by means
other than cash contributions. The couple treated all their assets as jointly owned and made
payments from a joint bank account to which they both contributed their salaries. When
5
Although a contested issue, the circuit court found that the landowner and woman were unmarried. Id. at
235.
8
Umland stopped contributing income to the joint bank account, it was in furtherance of a
business the parties started by agreement. Umland's testimony supported a finding that
Graham knew of the consequences and risks of Umland starting a business and agreed to
support the couple financially while Umland was attempting to start and grow a new
business. While Graham countered this testimony, the circuit court was free to disbelieve
Graham's testimony. Blair v. Blair, 147 S.W.3d 882, 886 (Mo. App. W.D. 2004) ("The
trial judge has absolute discretion as to the credibility of witnesses and the weight of their
testimony is a matter for the trial court, and its findings on witness credibility are never
reviewable by the appellate court.")
There is a presumption that tenants in common hold equal shares of property they
own. The circuit court did not error in finding that Graham failed to present sufficient
credible evidence to rebut this presumption.
As to the HELOC, Graham argues that the parties had previously agreed that
Umland would be solely responsible for the debt because it was solely for the benefit of
Umland's businesses. Graham contends that the court "erroneously makes a finding that
Plaintiff denied the existence of an agreement that the HELOC was her 'sole
responsibility.'" In her briefing, Graham states "[Umland] clearly testified on cross-
examination that the HELOC was her responsibility." While true that Umland did respond
"yes" to a question of whether the HELOC was her "responsibility," a close review of the
transcript, in the cited testimony and its surrounding testimony, shows that, at best,
Umland's testimony was conflicting. When read in its totality, Umland's claim of
responsibility could properly be interpreted by the fact finder to be related to the fact that
9
the HELOC was used to provide funding for her businesses and she was responsible for
managing the businesses and making payments on the line of credit from those businesses.
When specifically asked about whether Graham told Umland that "the note belongs to
you," suggesting sole liability for repayment, Umland testified: "I don't recall that." Again,
as noted above, the circuit court was free to disbelieve Graham's testimony. Blair, 147
S.W.3d at 886. It was also free to believe Umland's testimony, both in direct and on cross-
examination, that there was never any agreement that the HELOC would be repaid solely
by her.
The HELOC was taken out jointly by Umland and Graham and secured by their real
property. According to Umland's testimony, the couple knew that the businesses might
lose money. When the HELOC's credit limit was increased, it was again done jointly by
the couple. Umland testified that she regularly discussed business purchases with Graham
including a $10,000 van purchased for Umland's business, paid for by the HELOC, but that
was jointly titled between the women. Umland testified that the HELOC was opened for
their joint benefit. Additionally, money from the HELOC was used to fix up a home
previously owned by Graham's mother, which was renovated by Umland and eventually
sold. Money from the HELOC was also used to prepare the Redbud Property for sale after
Umland and Graham's separation.
It is clear from the Judgment that the court believed that the couple intended to live
as a married couple sharing their finances and pooling their assets. The court specifically
found that the Graham had equal access to all bank statements concerning the HELOC and
that the parties agreed to take the business risk together. In effect, the court simply chose
10
to disbelieve Graham's assertion that the HELOC was to be Umland's sole responsibility,
a finding supported by the record. As noted above, we will defer to the circuit court on
questions of witness credibility.
Graham attempts to challenge Umland's credibility by noting that Umland failed to
disclose certain assets in her original Petition and to note that some assets were titled
individually. While such issues might call into question Umland's credibility, these issues
were fully presented to the circuit court, which found, on the question of donative intent
and responsibility for the HELOC loan, Umland's evidence was more credible. This court
does not revisit such a determination on appeal.
Conclusion
For the reasons stated above, we affirm.
__________________________________
Gary D. Witt, Judge
All concur
11