Miller v. Stuckey

[Cite as Miller v. Stuckey, 2015-Ohio-3819.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
CRAWFORD COUNTY
MARCENE K. MILLER, ET AL.,
PLAINTIFFS-APPELLEES, CASE NO. 3-15-10
v.
DEAN STUCKEY, ET AL., OPINION
DEFENDANTS-APPELLANTS.
Appeal from Crawford County Common Pleas Court
Trial Court No. 13-CV-0176
Judgment Reversed and Cause Remanded
Date of Decision: September 21, 2015
APPEARANCES:
Howard B. Hershman for Appellants
Geoffrey L. Stoll for Appellees
Case No. 3-15-10
PRESTON, J.
{¶1} Defendants-appellants, Dean Stuckey (“Dean”) and Jackie Stuckey
(collectively, the “Stuckeys”), appeal the May 1, 2015 judgment entry of the
Crawford County Court of Common Pleas granting partial summary judgment in
favor of plaintiffs-appellees, Marcene K. Miller (“Marcene”) and Marcene K.
Miller, Trustee of the Miller Family Trust (collectively, the “Plaintiffs”). For the
reasons that follow, we reverse.
{¶2} On June 11, 2013, Marcene, in her individual capacity and as trustee
of the Miller Family Trust (the “Trust”), filed a complaint against the Stuckeys,
asserting seven counts: Count One of conversion, Count Two of breach of
fiduciary duty, Count Three of “fraud/fraud in the inducement,” Count Four of
undue influence, Count Five of unjust enrichment, Count Six of punitive damages,
and Count Seven of invalidity of deed. (Doc. No. 1). In Count Seven, the
Plaintiffs allege that transfers of real property located in Seneca and Crawford
Counties, Ohio, from the Trust to Dean are invalid because the quit-claim deeds
(the “Deeds”) were executed in Florida and do not comply with the formal deed
requirements under Florida law. (Id. at ¶ 3, 29-30, 37, 58-63). The Trust contains
a Florida choice-of-law provision. (Doc. No. 42, Exs. A-1, A-2 at ¶ 7).
{¶3} On June 26, 2013, the Stuckeys filed an answer to the Plaintiffs’
complaint. (Doc. No. 8).
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{¶4} Two related cases—Seneca County Common Pleas Court case No. 13-
CV-0154 and Crawford County Municipal Court case No. CVG 1300618—were
transferred to the Crawford County Court of Common Pleas, where the trial court
consolidated them with the case, discussed above, filed by the Plaintiffs on June
11, 2013, Crawford County Common Pleas Court case No. 13-CV-0176. (Doc.
Nos. 9, 10, 11). Seneca County Common Pleas Court case No. 13-CV-0154
originated with a June 13, 2013 complaint filed by Marcene, in her individual
capacity and as trustee of the Trust, against the Stuckeys, asserting the same
counts, in the same order, as her June 11, 2013 complaint, described above, filed
in Crawford County Common Pleas Court case No. 13-CV-0176. (Doc. No. 11).
Crawford County Municipal Court case No. CVG 1300618 originated with a
complaint in forcible entry and detainer filed by Dean against Marcene in her
individual capacity. (Doc. No. 10).
{¶5} On August 27, 2013, with leave of court, the Stuckeys filed an
amended answer and counterclaim. (Doc. Nos. 14, 20, 21). Their counterclaim
contained two counts: Count One of quiet title and Count Two of declaratory
judgment. (Doc. No. 21).
{¶6} On September 16, 2013, the Plaintiffs filed a reply to the Stuckeys’
counterclaim. (Doc. No. 25).
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{¶7} On January 28, 2014, the Stuckeys filed a motion for summary
judgment on the Plaintiffs’ counts and on Count One of the Stuckeys’
counterclaim. (Doc. No. 35).
{¶8} On March 10, 2014, the Plaintiffs filed a combined motion for
summary judgment and memorandum in opposition to the Stuckeys’ motion for
summary judgment. (Doc. No. 42). Relying on the Trust’s Florida choice-of-law
provision, the Plaintiffs requested, among other things, “judgment in their favor,
declaring the quit claim deeds at issue to be void ab initio and set aside, with legal
title to the real estate being restored to Marcene K. Miller, Trustee of The Miller
Family Trust.” (Id. at 58).
{¶9} On April 1, 2014, the Stuckeys filed a combined reply memorandum
in support of their motion for summary judgment and memorandum in opposition
to the Plaintiffs’ motion for summary judgment. (Doc. No. 44).
{¶10} On April 17, 2014, the Plaintiffs filed a reply memorandum in
support of their motion for summary judgment. (Doc. No. 46).
{¶11} On May 19, 2014, the trial court denied the Stuckeys’ motion for
summary judgment and the Plaintiffs’ motion for summary judgment. (Doc. Nos.
47, 48).
{¶12} On June 2, 2014, the Stuckeys filed a “motion for reconsideration of
defendants’ motion for summary judgment only as to the issue of the legal validity
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of the two deeds by which property was transferred to defendant Dean Stuckey.”
(Doc. No. 49).
{¶13} On June 6, 2014, the Plaintiffs filed a response to the Stuckeys’
motion for reconsideration, concurring with the Stuckeys that the validity of the
Deeds is a purely legal question to be determined by the trial court and requesting
that the trial court reconsider that issue. (Doc. No. 50).
{¶14} On July 31, 2014, the trial court denied the Stuckeys’ motion for
reconsideration. (Doc. No. 51).
{¶15} On February 10 and 17, 2015, after a new judge took office, the
Plaintiffs and the Stuckeys, respectively, moved for reconsideration of the trial
court’s denial of their motions for summary judgment concerning the issue of the
validity of the Deeds. (Doc. Nos. 63, 64).
{¶16} On April 3, 2015, the trial court filed an entry concluding that the
Trust’s Florida choice-of-law provision is enforceable and that the Deeds are
invalid because they do not comply with Florida’s formal requirements for deeds,
which requires two subscribing witnesses. (Doc. No. 67).
{¶17} On April 9, 2015, the Stuckeys filed a motion for reconsideration of
the trial court’s April 3, 2015 decision granting summary judgment in the
Plaintiffs’ favor concerning the validity of the Deeds. (Doc. No. 68).
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{¶18} On April 20, 2015, the Plaintiffs filed a response to the Stuckeys’
motion for reconsideration. (Doc. No. 69).
{¶19} On April 22, 2015, the Stuckeys filed a reply memorandum in
support of their motion for reconsideration. (Doc. No. 70).
{¶20} On May 1, 2015, the trial court filed an entry declaring the Deeds
transferring the Seneca County and Crawford County properties void ab initio,
restoring legal title to the Seneca County and Crawford County real properties to
Marcene as trustee of the Trust, dismissing Dean’s forcible entry and detainer
action against Marcene, and dismissing Count One of quiet title of the Stuckeys’
counterclaim. (Doc. No. 71). In that entry, the trial court determined that there
was no just reason for delay. (Id.).
{¶21} The Stuckeys filed their notice of appeal on May 15, 2015. (Doc.
No. 74). They raise one assignment of error for our review.
Assignment of Error
The court below erred when it found that the two quit claim
deeds in question were fatally defective because they did not
have subscribing witnesses as prescribed by Florida law for a
Florida conveyance.
{¶22} In their assignment of error, the Stuckeys offer two reasons why the
trial court erred in declaring the Deeds invalid and void ab initio: (1) “the
constitutional limitations on the ability of a state to direct or control how real
property is transferred within another state has led Florida to acknowledge and
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direct that the law of the State where the real estate is located controls with regard
to questions of formalities in the conveyance of property in that state”; and (2)
“the trust agreement must be construed so as to allow the purposes of the settlor to
be achieved rather than frustrated.” (Appellants’ Brief at 8). The crux of the
Stuckeys’ argument is based on the doctrine that, “[i]n general, real property is
subject to the laws of the state in which it is situated,” or the “situs” of the
property. (Id. at 9). The Plaintiffs argue that the doctrine of situs is archaic and
that the Trust’s Florida choice-of-law provision trumps the doctrine of situs, such
that the Deeds, which transferred real properties in Ohio, are required to comply
with Florida’s formal requirements for deeds.
{¶23} We review a decision to grant summary judgment de novo. Doe v.
Shaffer, 90 Ohio St.3d 388, 390 (2000). Summary judgment is proper where there
is no genuine issue of material fact, the moving party is entitled to judgment as a
matter of law, and reasonable minds can reach but one conclusion when viewing
the evidence in favor of the non-moving party, and the conclusion is adverse to the
non-moving party. Civ.R. 56(C); State ex rel. Cassels v. Dayton City School Dist.
Bd. of Edn., 69 Ohio St.3d 217, 219 (1994).
{¶24} Article IX, Paragraph 3 of the Trust contains the following choice-of-
law provision:
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Applicable Law
This instrument has been prepared and was executed in the
State of Florida where Grantor(s) are residents. All questions
concerning the meaning and intention of terms of this instrument or
its validity, and all questions relating to any performance under it,
shall be resolved in accordance with laws of this State.
(Doc. No. 42, Exs. A-1, A-2 at ¶ 7). Marcene, as trustee of the Trust, executed the
Deeds in Brevard County, Florida on January 30, 2013. (See Doc. No. 71, Exs. A,
B). A Florida notary public notarized the Deeds, but the Deeds do not bear
signatures of two subscribing witnesses. (Id.). The parties do not dispute that the
Deeds are valid under Ohio law, which does not require any subscribing witnesses
to a deed, or that the Deeds are invalid under Florida law, which requires two
subscribing witnesses to a deed. Compare R.C. 5301.01 with Fla.Stat.Ann.
689.01. The issue in this case is whether Ohio law or Florida law governs the
execution and formal requirements of the Deeds.
{¶25} The Supreme Court of Ohio adopted the Restatement of the Law 2d,
Conflict of Laws, to govern choice-of-law issues. Am. Interstate Ins. Co. v. G &
H Serv. Ctr., Inc., 165 Ohio App.3d 104, 2005-Ohio-5753, ¶ 9 (3d Dist.), citing
Morgan v. Biro Mfg. Co., Inc., 15 Ohio St.3d 339, 341-342 (1984). See also Lewis
v. Steinreich, 73 Ohio St.3d 299, 303 (1995) (“In making choice-of-law
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determinations, this court has adopted the theories stated in the Restatement of the
Law 2d, Conflict of Laws.”), citing Morgan at 341-342.
Restatement of the Law 2d, Conflict of Laws, Section 223 (1971) provides:
(1) Whether a conveyance transfers an interest in land and the
nature of the interest transferred are determined by the law that
would be applied by the courts of the situs.
(2) These courts would usually apply their own local law in
determining such questions.
Comment e to Section 223 provides, “In the absence of statute, the courts of the
situs would usually apply their own local law to determine questions involving the
formalities necessary for the validity of a conveyance of an interest in land.”
Restatement of the Law 2d, Conflict of Laws, Section 223, Comment e (1971).
See also Restatement of the Law 2d, Conflict of Laws, Section 278, Comment c
(1971) (“Where the owner makes a conveyance of land in trust the validity of the
conveyance is determined by the law that would be applied by the courts of the
situs. Usually these courts would apply their local law. Thus the owner’s
capacity, the formal requirements for a conveyance, and the substantial validity of
the conveyance would usually be determined by the local law of the situs (see §
223).”). “[T]he term ‘formalities’ applies to such requirements as those of a
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writing, of a seal, of witnesses and of acknowledgment.” Restatement of the Law
2d, Conflict of Laws, Section 223, Comment e (1971).
{¶26} A transfer of an interest in land is governed by the laws selected by
application of the rule in Restatement of the Law 2d, Conflict of Laws, Section
223 (1971), notwithstanding a choice-of-law provision in a contract governing that
contract’s interpretation, validity, and performance. See S.E.C. v. Mgt. Solutions,
Inc., D.Utah No. 2:11-CV-01165-BSJ, 2014 WL 6085666, *2-5 (Nov. 13, 2014),
appeal filed, 10th Cir. No. 14-4157. Indeed, “‘not all claims in a case are
necessarily governed by a choice-of-law provision that expressly governs only
contractual matters.’” Id., quoting Fairmont Supply Co. v. Hooks Indus., Inc., 177
S.W.3d 529, 534-535 (Tex.App.2005).
{¶27} Restatement of the Law 2d, Conflict of Laws, Section 189 (1971)
and, more specifically, Comment a to that section illustrate this point. Section 189
provides:
The validity of a contract for the transfer of an interest in land and
the rights created thereby are determined, in the absence of an
effective choice of law by the parties, by the local law of the state
where the land is situated unless, with respect to the particular issue,
some other state has a more significant relationship under the
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principles stated in § 6 to the transaction and the parties, in which
event the local law of the other state will be applied.
Restatement of the Law 2d, Conflict of Laws, Section 189 (1971). Comment a
explains the distinction between a contract for the transfer of an interest in land
and the actual transfer of that interest:
A distinction must here be drawn between a contract for the transfer
of an interest in land and the actual transfer of such an interest. The
validity of a contract for the transfer of an interest in land, and the
rights created thereby, are determined by the local law of the state
selected by application of the rule of this Section. On the other
hand, whether the contract operates as an actual transfer of an
interest in the land depends upon the law selected by application of
the rule of § 223. A contract to transfer an interest in land may be
valid as a contract but inoperative as a transfer, or, in the alternative,
it may be invalid as a contract but operative as a transfer.
(Emphasis added.) Restatement of the Law 2d, Conflict of Laws, Section 189,
Comment a (1971). As we explained above, Section 223 states that whether a
conveyance transfers an interest in land is determined by the law that would be
applied by the courts of the situs and that the situs courts usually apply their own
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local law. Mgt. Solutions, Inc. at *2-3, citing Restatement of the Law 2d, Conflict
of Laws, Section 223 (1971).
{¶28} Here, the Trust’s choice-of-law provision governs the Trust’s
interpretation, validity, and performance. The Trust’s choice-of-law provision
does not, however, govern the formalities necessary for the validity of a
conveyance of an interest in real property held in the Trust. See Restatement of
the Law 2d, Conflict of Laws, Section 223 (1971); Mgt. Solutions, Inc. at *2-4.
Rather, under the Restatement, “the law that would be applied by the courts of the
situs” of the real property, Ohio, governs the formal, or technical, requirements of
the Deeds. See Restatement of the Law 2d, Conflict of Laws, Section 223 (1971).
Although this appears to be a case of first impression in Ohio and informative case
law is scarce, we can find no Ohio statute requiring or allowing application of
Florida law in this case, and the Plaintiffs have directed us to none. See Warwick
v. Warwick, 4th Dist. Ross No. 98CA2403, 2000 WL 228608, *4 (Feb. 25, 2000)
(“[T]he trial court determined that the marriage contract did not apply to the
property because the issue of dower is governed by the law of the site of the
property, i.e., the lex rei sitae. We find that the trial court correctly determined
that Ohio law applies to the property situated in Ohio.”). See also In re
Cunningham, Bankr.N.D.Ohio No. 06-14882, 2008 WL 2746023, *3, fn. 2 (July
11, 2008) (citing Restatement of the Law 2d, Conflict of Laws, Section 223 (1971)
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and concluding that “because the real property in question is located in Ohio, the
Court will apply Ohio law in determining whether a resulting trust exists for the
benefit of the estate”).1
{¶29} Therefore, notwithstanding the Trust’s Florida choice-of-law
provision, because the real property conveyed by the Deeds is located in Ohio, and
because no statute requires or allows application of Florida law to the formal
requirements of the Deeds, Ohio law governs the execution and formal
requirements of the Deeds. There are no genuine issues of material fact
concerning this issue. The parties do not dispute that the Deeds—which are
signed by Marcene as Trustee and notarized—are valid under Ohio law, which,
unlike Florida law, does not require two subscribing witnesses. Accordingly, the
Deeds are not invalid for failure to bear the signatures of two subscribing
witnesses, and the trial court erred as a matter of law by holding them to be invalid
and void ab initio for this reason. We reverse and remand for resolution of the
parties’ remaining claims.
{¶30} The Stuckeys’ assignment of error is sustained.
1
Although it does not control our determination of this case, we note that Florida law similarly applies the
law of the situs of real property:
When an instrument purports to convey title or an interest in real property which has its
situs within a state, the formal validity and requirements of the document which seeks to
affect the title to such property are governed by the lex rei sitae–the law of the state
wherein the property is located.
Kyle v. Kyle, 128 So.2d 427, 429 (Fla.App.1961).
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{¶31} Having found error prejudicial to the appellants herein in the
particulars assigned and argued, we reverse the judgment of the trial court and
remand for further proceedings consistent with this opinion.
Judgment Reversed and
Cause Remanded
SHAW and WILLAMOWSKI, J.J., concur.
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