Adamson v. Adamson
| Decision Date | 28 October 2021 |
| Docket Number | 2020-SC-0175-DG |
| Citation | 635 S.W.3d 72 |
| Parties | Charles ADAMSON, Appellant v. Jonathan ADAMSON ; and Paul Adamson, Appellee |
| Court | United States State Supreme Court — District of Kentucky |
COUNSEL FOR APPELLANT: Robert B. Frazer, Marion, Frazer & Massey.
COUNSEL FOR APPELLEE: William Clint Prow.
This case is before the Court on appeal of an order to enforce a settlement agreement. Charles Adamson,1 the Appellant, appeals the opinion of the Court of Appeals affirming the order and judgment of the Union Circuit Court. We granted discretionary review to determine whether the Statute of Frauds is applicable. For the following reasons, we reverse the Court of Appeals and remand to the Union Circuit Court with instructions to partially vacate its order and judgment.
Rickie Adamson died in 2013. He left behind a wife, Loueva Adamson, who was stepmother to his three sons: Jonathan and Paul Adamson, the Appellees, and Charles. Long before his death, he and his wife purchased a farm (the farm) jointly, with rights of survivorship. Upon Rickie's death, Loueva sought to probate a holographic will purported to be that of her husband. The will left the entirety of his estate to Loueva. The Union District Court approved settlement of the estate on February 14, 2014.
In May of 2014, Loueva sold the farm to Charles and his wife, Vanda Adamson. The recorded deed lists both Charles and Vanda as purchasers, and they are tenants-in-common.2 It is undisputed that the farm was never a part of the estate nor has any party contested the validity of the deed.
Subsequently, Jonathan and Paul had a forensic document examination done upon the will. The examiner concluded the will was a forgery. Upon that basis, they filed an action in Union Circuit Court in August 2015. The named defendants were Loueva Adamson, individually and as Executrix of Rickie Adamson's estate, and Charles Adamson.
The Hon. Stephen M. Arnett was engaged as attorney for Loueva, the estate, and Charles. He filed a motion to dismiss on Charles’ behalf because there was no allegation of wrongdoing against him regarding the alleged forgery. Jonathan and Paul opposed dismissal, arguing that Charles was a potential beneficiary. The trial court agreed and denied the motion.
Eventually, a mediation was conducted on June 29, 2017. As is typical, Arnett and his clients were in one room and Jonathan and Paul with their attorney in another. The parties evidently came to an agreement regarding the lawsuit. The three brothers then entered a room together with no other party present. In this meeting, some kind of oral agreement was reached regarding the farm.3
At a hearing on June 11, 2018, Charles testified he thought they reached an agreement to deed the farm over to an LLC, which he would operate. Additionally, he would determine the shares of ownership in the LLC. Finally, upon the death of his brothers, their interest in the LLC would pass to him and his heirs. There was no testimony heard to the contrary. Jonathan and Paul contend the deal was to deed the farm over to an LLC in which all three brothers would own equal shares. They agreed, however, that Charles would manage the LLC.
The 8th clause of the mediation agreement states, in pertinent part:
As a part of this agreement, the referenced Sale Agreement between Respondent, Loueva Adamson, and Respondent, Charles Adamson and Vanda Adamson, will except as hereinafter set out, be voided and set aside in its entirety. Simultaneous with the voiding of the original Sale Agreement, the Respondent, Loueva Adamson, and Respondent, Charles Adamson, and his wife, Vanda Adamson, each agree to execute another Contract of Sale Agreement (Second Sale Agreement) wherein they agree to sell the farm to Respondent, Charles Adamson, and to Petitioners, Paul Adamson and Jonathan Adamson, equally, as tenants in common, for the the [sic] sale price of Three Hundred Fifty Three Thousand Nine Hundred Nine Dollars ($353,909.00) ...
The 9th clause of the mediation agreement states, in pertinent part:
With respect to the farm, Petitioner, Paul Adamson and Jonathan Adamson; and Respondent, Charles Adamson, further agree that a business entity to be called Bluegate Farms, LLC ... will be formed in accordance with the laws of the Commonwealth of Kentucky, which will be equally owned by Paul Adamson, Jonathan Adamson, and Charles Adamson ... all parties agree that ... Charles Adamson will be designated as the manager of Bluegate with authorities and responsibilities commensurate with that position ...
Because of the complexity of the mediation agreement, the mediator agreed to be the one to reduce the terms to writing, including the farm agreement. Charles testified he told the mediator the terms of the farm agreement, but his brothers were not present when he did. He also testified he assumed his brothers told the mediator the same terms as well, but he was not present if they did. When the written mediation agreement was completed is unclear. Charles testified he did not see the mediation agreement in writing until approximately two months after the mediation.
Regardless of the exact timeframe, the trial court found when Arnett took the mediation agreement to Charles and his wife for their signatures, he refused to sign it as the terms did not match what he believed the oral agreement to have been. Arnett informed Charles he could no longer represent him as counsel and advised him to seek new counsel. Shortly thereafter, Charles acted upon that advice, and new counsel was officially substituted in November 2017.
Concurrently with the change in Charles’ representation, Jonathan and Paul had filed a "Motion to Enter Judgment." Substantively though, they sought to enforce the mediation agreement. The motion was taken under advisement, but no ruling was forthcoming. The motion was re-noticed in April 2018, and a hearing was held on May 14, 2018. At this hearing, the trial court determined that Charles would need to testify before it could make a ruling. Also, Arnett represented to the court that the farm agreement was "outside of my representation" of Charles.
On June 11, 2018, Charles testified regarding the details of the farm agreement, which were previously discussed. The only other issues presented in this case are as follows. First, the apparent dispute as to whether Arnett was Charles’ attorney. Charles testified that he never hired Arnett which is technically true. But Arnett made several filings on behalf of Charles, and he admitted that he was privy to private conversations between himself, Arnett, and Loueva.
The second issue is the testimony regarding the relationship between Charles and Vanda. Charles testified his brothers had asked him at the mediation if she would agree to any deal they reached regarding the farm. Charles responded he would tell her to do so. Counsel sought clarification, and he testified his statement to his brothers was "I'll just tell her to if we come to an agreement."
The trial court issued its order and judgment in December 2018. The substantive rulings of the trial court were that the Statute of Frauds was not applicable, but if it was, it was satisfied. This latter ruling was based on a determination that Arnett was Charles’ agent and signed the mediation agreement on his behalf. The trial court also ruled that Charles was his wife's agent at the mediation agreement thereby binding her to its terms as well. Finally, the trial court ruled that Charles should be equitably estopped from arguing that he was not his wife's agent and that she was a necessary and indispensable party. The trial court adopted the mediation agreement as part of its judgment and ordered it enforced. Charles appealed.
Subsequently, the Court of Appeals ruled that the Statute of Frauds was not applicable because the farm agreement was not a contract of sale but "merely a contractual, written agreement to resolve outstanding issues between the parties in a civil dispute." The Court of Appeals found that Charles was his wife's agent at the mediation based upon apparent authority, citing solely to Charles’ statement that he would tell his wife to go along with any deal. The Court of Appeals also applied equitable estoppel to estop Charles from arguing he was not his wife's agent and that she was an indispensable party on appeal. Charles sought discretionary review from this Court, which we granted.
We now address the merits of the appeal.
On all issues discussed our standard of review is de novo. The interpretation and application of statutes is a question of law and the lower courts’ judgments are not entitled to deference. Estate of Benton v. Currin , 615 S.W.3d 34, 36 (Ky. 2021). Settlement agreements are a type of contract; therefore, their interpretation is a question of law. Frear v. P.T.A. Indus., Inc. , 103 S.W.3d 99, 105 (Ky. 2003). The question of whether an agency relationship exists is a question of law when the facts giving rise to the relationship are undisputed. Nazar v. Branham , 291 S.W.3d 599, 606 (Ky. 2009).
The Statute of Frauds "prohibits the sale or transfer of land by parol ..." Bennett v. Horton , 592 S.W.2d...
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