Cristie A Binhammer v. Daniel W Reilly

COURT OF APPEALS OF VIRGINIA
Present: Judges Frank, Felton and Kelsey
Argued at Richmond, Virginia
CRISTIE A. BINHAMMER
MEMORANDUM OPINION * BY
v. Record No. 1907-01-2 JUDGE WALTER S. FELTON, JR.
FEBRUARY 11, 2003
DANIEL W. REILLY
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY
Herbert C. Gill, Jr., Judge
Paul T. Buckwalter, II, for appellant.
Jennifer E. Crossland (William H. Parcell,
III; Parcell, Webb & Wallerstein, P.C., on
briefs), for appellee.
Cristie Binhammer ("Binhammer") appeals from a final order of
partition of the marital home dated June 8, 2001. She contends on
appeal that the trial court erred (1) in voiding as a mutual
mistake of facts, the property clause, paragraph (D)(16), in the
property settlement agreement; (2) in failing to estop Daniel
Reilly ("Daniel") from claiming a higher value for his interest in
the family home, after acquiring his father's interest; and (3) in
rewriting the terms of the property settlement agreement and
increasing the value of Daniel's interest in the family home. For
the following reasons, we affirm the judgment of the trial court.
* Pursuant to Code § 17.1-413, this opinion is not
designated for publication.
I. BACKGROUND
On June 14, 1980, Cristie Binhammer and Daniel Reilly were
married. In June 1987, with the substantial financial
assistance of Daniel's father, William Reilly ("William"), the
couple purchased a house. William provided the couple with
approximately $10,000 as a down payment on the real estate and
for closing costs. He was an applicant with Binhammer and
Daniel for the purchase money loan for the property.
Binhammer and Daniel dispute whether the $10,000 was a loan
or a gift. Binhammer claims the money was a gift. Daniel
contends the money was a loan and that his father informed the
couple that they did not have to pay interest to him on the
$10,000 he provided. However, Daniel further contends that if
the house was sold, his father expected to be repaid. In
addition, the parties agreed that in return for the down
payment, William would be permitted to claim the value of
mortgage interest payments as a deduction on his tax returns.
He filed for the deduction on his tax returns each year until
1996, even though Daniel and Binhammer separated in 1991 and
divorced in 1993. In 1996, Binhammer refused to provide William
Reilly with the necessary documentation to claim the interest
deduction.
On June 12, 1987, the house was conveyed by deed to
Binhammer, Daniel, and William. The deed conveyed the property
as follows:
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This deed made this 12th day of June, 1987,
by and between Richard G. Zyne and Paula C.
Zyne, husband and wife, herein called
"Grantor" and Daniel W. Reilly and Cristie
A. Reilly, husband and wife, and William C.
Reilly, herein called "Grantee":
Witness that for and in consideration of the
sum of Ten Dollars ($10.00) and other
valuable consideration . . . the said
Grantors do hereby grant and convey with
General Warranty and English Covenants of
Title to the said Daniel W. Reilly and
Cristie A. Reilly, his wife, a two thirds
undivided interest as tenants by the
entirety with the right of survivorship as
at common law in and to the below described
real property and to William C. Reilly,
married, a one third undivided interest as
his sole separate equitable estate to be
held, owned, and disposed of as hereinafter
set forth in and to the below described real
property; the said Daniel W. Reilly and
Cristie A. Reilly, his wife, and William C.
Reilly, married, to hold title as joint
tenants with the right of survivorship as at
common law . . . .
(Emphasis added.)
On June 16, 1991, Binhammer and Daniel separated. On March
22, 1993, they entered into a property settlement agreement that
purported to address, among other things, their respective
interests in the home. The property settlement agreement states
in relevant part:
D. REAL ESTATE
16. MARITAL RESIDENCE. The parties
agree that Husband's share of the equity in
the home shall be fixed at $2,000.00 and
shall be paid by Wife to Husband upon the
earlier of (a) the sale of the home or (b)
remarriage of the Wife.
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Husband hereby relinquishes all right, title
and interest in the home other than that
designated herein. Wife shall be
responsible for all maintenance.
This agreement is based upon the following
assumptions:
(1) Husband's father has no financial claim
against the home.
(2) Wife is free to sell the home at her
sole discretion.
(3) Husband may not use this figure to
offset other obligations.
(Emphasis added.)
William was not a party to the property settlement
agreement and was not consulted by Binhammer or her attorney,
who prepared the document, prior to the execution of the
agreement. The agreement was affirmed, ratified, and
incorporated into the final decree of divorce on May 4, 1993.
On August 1, 1996, William Reilly executed a will leaving his
interest in the home to his son. The will states in pertinent
part:
I devise all of my right, title and interest
in and to certain lot(s) and home located at
8245 Greenock Drive, Richmond, VA 23235, to
my son, Daniel W. Reilly, in fee simple.
Any indebtedness on said property will be
assumed by Daniel W. Reilly and not paid
from my estate.
In 1997, on a date not specified in the record, Binhammer
remarried. Subsequent to the marriage, however, she failed to
pay Daniel the $2,000 for his share of the equity in the home,
as required by the property settlement agreement. Also in 1997,
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Binhammer filed an application to obtain a loan for the home.
In order to obtain the loan, she mailed a deed to Daniel and
William asking for the transfer of their respective interests in
the home to her so that she would be the sole owner of the
property. Neither signed the deed because of the final illness
of William. The loan fell through.
Shortly thereafter, William Reilly died. Relying on the
provisions of his father's will, Daniel asserted ownership to
his father's one-third interest in the home. Relying on the
property settlement agreement, Binhammer initiated a suit for
specific performance to obtain, for $2,000, the original
one-third interest held by Daniel as well as the one-third
interest that passed to him through William's will.
On November 2, 2000, following a number of hearings, the
trial court held that the disposition of the marital residence
was based on certain assumptions, assumptions that "were not
accurate and constitute a mutual mistake of fact. The first
assumption was that 'husband's father has no financial claim
against the home.' The evidence is clear that the husband's
father had a legal interest in the home and, therefore, had a
financial claim against the home." As a result, the court
severed paragraph (D)(16) from the property settlement agreement
relating to the sale of the marital property and held the real
estate was subject to partition. Based on the language of the
1987 deed conveying the property and the transfer of William's
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interest at his death, the trial court ruled that Daniel owned a
two-thirds undivided interest in the property and that Binhammer
owned a one-third undivided interest.
On March 7, 2001, an ore tenus hearing was held. The trial
court reiterated its finding that Daniel owned a two-thirds
undivided interest and that Binhammer owned a one-third
undivided interest in the property. It set the equity property
value at $33,441.15 and permitted either party to purchase the
share of the other party. On June 8, 2001, the trial court
entered a final order of partition. Daniel was ordered to
convey his two-thirds interest in the property to Binhammer in
return for payment in the sum of $22,291.87. Binhammer
subsequently paid Daniel for his two-thirds undivided interest
and Daniel conveyed to Binhammer by deed, his undivided
interests in the subject property.
II. ANALYSIS
"Under familiar principles we view [the] evidence and all
reasonable inferences in the light most favorable to the
prevailing party below. Where, as here, the court hears the
evidence ore tenus, its finding is entitled to great weight and
will not be disturbed on appeal unless plainly wrong or without
evidence to support it." Pommerenke v. Pommerenke, 7 Va. App.
241, 244, 372 S.E.2d 630, 631 (1988) (quoting Martin v.
Pittsylvania Dep't of Soc. Servs., 3 Va. App. 15, 20, 348 S.E.2d
13, 16 (1986)).
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This matter has been subject to a long and tortuous
journey, including several prior show cause orders issued by
this Court resulting from Binhammer's failure to adhere to our
rules for filing an appeal. The sole issue before us is whether
the trial court correctly determined the value of the parties'
respective interests in the marital home. The dispute arises
out of paragraph (D)(16) of the property settlement agreement
relating to the disposition of the marital home.
During oral arguments on November 14, 2002, the question
was raised as to whether we had jurisdiction to hear the appeal
from the final order of partition, a proceeding in equity. The
parties were asked to brief this additional question. Having
reviewed the briefs filed by counsel and considered the matter,
we conclude that we have jurisdiction pursuant to Code
§§ 17.1-405(3)(f) and 8.01-670(A)(1)(a).
A. MUTUAL MISTAKE
We first consider whether the trial court erred in voiding
as mutual mistake of facts, paragraph (D)(16) of the property
settlement agreement. We find that it did not.
Generally, "[i]f certain facts are assumed
by both parties as the basis of the
contract, and it subsequently appears that
such facts did not exist, the contract is
inoperative." Virginia Iron, Coal, & Coke
Co. v. Graham, 124 Va. 692, 708, 98 S.E.
659, 664 (1919).
The mistake may be common to both parties to
a transaction, and may consist either in the
expression of their agreement, or in some
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matter inducing or influencing the
agreement, or in some matter to which the
agreement is to be applied. Nothing is more
clear in equity than the doctrine that a
contract founded in mutual mistake of the
facts constituting the very basis or essence
of it will avoid it.
Jennings v. Jennings, 12 Va. App. 1187, 1192, 409 S.E.2d 8, 12
(1991).
We agree with the trial court that paragraph (D)(16) of the
property settlement agreement was void because it was based on
the mutual mistake of facts assumed by the parties. The 1987
deed to the marital house clearly provides William Reilly with a
one-third undivided interest. His name appears on the purchase
money loan documents. Additionally, he provided the parties
with a substantial down payment on the purchase price of the
house and paid the closing costs. Despite the glaring evidence
of William's interest in the house, Binhammer's attorney
prepared the property settlement agreement without contacting
William as to his claims against the property and without
seeking to make him a party to the agreement. As drafted and
executed, the property settlement agreement assumed that William
had no financial claim against the home and that Binhammer was
"free to sell the home at her sole discretion." Both
assumptions were impossible to complete without affirmative acts
by William. The evidence clearly shows that William had an
interest in the house and because of that interest, Binhammer
was unable to sell it at her sole discretion. Since the
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property settlement agreement was based on assumed facts that
did not exist, the trial court did not err in voiding and
severing paragraph (D)(16) on the grounds of mutual mistake of
facts.
B. EQUITABLE ESTOPPEL
Having determined that the trial court did not err in
voiding paragraph (D)(16) in the property settlement agreement
because of mutual mistake of facts, we next consider whether the
trial court erred in failing to estop Daniel from claiming a
greater value for his interest in the family home than that
recited in paragraph (D)(16), particularly the claim of his
father's interest in the property acquired at his father's
death. The doctrine of equitable estoppel provides that a
"party is prevented by his own acts from claiming a right to
[the] detriment of [the] other party who was entitled to rely on
such conduct and has acted accordingly." Blacks Law Dictionary
551 (6th ed. 1990).
The elements necessary to establish
equitable estoppel are (1) a representation,
(2) reliance, (3) change of position, and
(4) detriment, and the party who relies upon
estoppel must prove each element by clear,
precise, and unequivocal evidence. Dominick
v. Vassar, 235 Va. 295, 298, 367 S.E.2d 487,
489 (1988). Because the doctrine of
estoppel prevents the showing of the truth,
it is applied rarely and only from
necessity.
Princess Anne Hills Civic League, Inc. v. Susan Constant Real
Estate Trust, 243 Va. 53, 59, 413 S.E.2d 599, 603 (1992).
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Binhammer failed to prove the elements of estoppel by clear and
unequivocal evidence.
Binhammer asserts that when Daniel signed the property
settlement agreement he represented that his father had "no
financial claim" against the home, thereby barring his claim to
any ownership interest of his father. Contrary to her
assertions, the record does not support such a contention. To
start, the trial court voided paragraph (D)(16) on which her
contention is based. With paragraph (D)(16) voided and severed
from the property settlement agreement, we must look to the
record for evidence that Daniel had affirmatively represented
that his father did not have an ownership interest in the
marital home and that Binhammer reasonably relied on that
representation. We find no such evidence.
The record before us indicates that Daniel's position has
consistently been that his father loaned the parties the money
to purchase the house and expected repayment should the house be
sold. The record reflects that neither Binhammer nor her
attorney contacted William to verify that he "had no financial
claim against the property." The record also reflects that
Daniel told Binhammer that she should talk with William about
any interest he claimed in the property.
It is inconceivable that Binhammer would rely on the
assumption that her father-in-law possessed no ownership or
financial interest in the marital home when the evidence clearly
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and overwhelmingly indicates the contrary. William's ownership
interest is reflected in the deed that creates a joint tenancy
with the right of survivorship of a one-third undivided interest
in the house. Furthermore, he provided a substantial down
payment for the property. His name appears on the purchase
money loan documents, and he deducted the interest from the
house payments, even for several years after they were divorced,
in lieu of Daniel and Binhammer making interest payments to him.
Neither Binhammer nor her attorney who drafted the property
settlement agreement contacted William to determine if the
assumptions were correct. Daniel had no authority to relinquish
any ownership interest his father possessed in the property or
the interests of any other third party without their consent.
Any reliance on the assumptions would be per se unreasonable
under the facts of this case.
Failing to prove the threshold elements, we need not
consider the other factors. We hold that the trial court did
not err in finding the evidence insufficient to apply the
doctrine of equitable estoppel.
C. VALUE OF DANIEL REILLY'S INTEREST
Finally we consider whether the trial court erred in
determining the value of Daniel's interest in the marital home,
at the time of his father's death. In the trial court below,
Binhammer requested that the marital home be partitioned and the
interests be valued as follows: (1) William's interest to be
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valued at zero, and (2) Daniel's one-third interest to be valued
at $2,000, based on the value set in the property settlement
agreement. The trial court refused such a valuation, finding
that Daniel and Binhammer based the disposition of the marital
home on certain assumptions it found to be mutual mistake of
facts. The court severed paragraph (D)(16) of the property
settlement agreement and ordered the property to be partitioned.
It determined from the evidence before it that Daniel owned a
two-thirds undivided interest and Binhammer a one-third
undivided interest.
The 1987 deed to the marital home clearly established that
from the time the home was purchased until his death, William
Reilly possessed a one-third undivided interest. Upon his
death, his will provided that any interest he owned in the
property would pass to Daniel. There is some question as to
whether William's one-third undivided interest passed by devise
under his will or passed in equal shares, to Binhammer and
Daniel, upon his death, as tenants in common by virtue of the
joint survivorship under the grantee clause of the deed. 1
However, the parties failed to preserve or brief that issue for
appellate review. Rule 5A:18. The evidence reflects no
1
See Jones v. Conwell, 227 Va. 176, 181, 314 S.E.2d 61, 64
(1984). Code § 20-111 provides that divorce creates a tenancy
in common between former spouses who held the property during
the marriage as tenants by the entirety with the right of
survivorship as at common law.
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miscarriage of justice or other good cause justifying an
exception to the operation of Rule 5A:18. Binhammer acquired
the entirety of Daniel's fee simple interest in the property by
deed pursuant to the partition order.
The judgment of the trial court is affirmed. 2
Affirmed.
2
The Court denies Binhammer's request that she be awarded
attorney's fees and costs in this appeal. Her continued
insistence that William Reilly had no financial claim or
ownership interest in the property, despite the clear language
of the deed of conveyance, his substantial monetary contribution
toward the purchase of the home, and his name being on the loan
documents, has resulted in unnecessarily protracted litigation.
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