Banks v. Banks

• Decision Date: 31 March 2016
• Docket Number: C.A. No. 10934–VCG
• Citation: 135 A.3d 311
• Parties: David L. Banks, Petitioner, v. Mackie H. Banks, individually and as Executrix of the Estate of Russell V. Banks, and the Estate of Russell V. Banks, Respondents.
• Court: Court of Chancery of Delaware

135 A.3d 311

David L. Banks, Petitioner
v.
Mackie H. Banks, individually and as Executrix of the Estate of Russell V. Banks, and the Estate of Russell V. Banks, Respondents.

C.A. No. 10934–VCG

Court of Chancery of Delaware.

Date Submitted: December 17, 2015
Date Decided: March 31, 2016

135 A.3d 313

William M. Kelleher and Phillip A. Giordano, of Gordon Fournaris & Mammarella, P.A., Wilmington, DE, Attorneys for Petitioner.

Charles T. Armbruster, III, of Tomasetti Law, LLC, Fenwick Island, DE, Attorney for Respondents.

GLASSCOCK, Vice Chancellor

At common law, real property transferred equally to two or more persons jointly was presumed to be held thereafter by those persons as joint tenants with right of survivorship, unless the documents of transfer provided explicitly that the property would be held as tenants in common.¹ The primary difference between these types of joint estates is the treatment of ownership following the death of a joint tenant: in the case of the former, the decedent's interest automatically vests in the surviving joint tenant; in the latter case, the fractional interest held by the decedent passes through his estate. By the end of the 18th century, the feudal concerns that led to this presumption had lost potency, and the harsh results often worked on heirs by the presumption, together with the recognition that full alienability of property maximized its value, made the common-law presumption socially undesirable.² Legislatures in jurisdictions in this country have since curbed and

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even eliminated³ the estate of joint tenancy with right of survivorship (“joint tenancy WROS”).⁴

Precisely two hundred years ago, the Delaware General Assembly eliminated, not the estate itself, but the presumption in its favor. By act of February 16, 1816, the legislature provided that “any law, usage or custom to the contrary notwithstanding,” no estate in real property shall be created “unless the premises therein mentioned shall be expressly granted, devised or conveyed to such persons to be held as joint tenants and not as tenants in common.”⁵ This has remained our law, with almost exactly the same statutory language controlling today; the current statute disallows creation of a joint tenancy WROS in real property by grant, devise, or conveyance “unless the premises therein mentioned are expressly granted, devised or conveyed to such persons, to be held as joint tenants and not as tenants in common.”⁶ The case before me poses a simple question, which remarkably has not been directly addressed in the two hundred years that this language has controlled the conveyance of realty: what words are required to “expressly” convey property “to be held as joint tenants and not as tenants in common?” Is a recitation of the precise verbiage of the statute required to create the disfavored estate? If not, is an explicit negation of a tenancy in common required? Or is it sufficient for the drafter to employ language leaving no doubt that the estate is to be held as a joint tenancy WROS, and thus not as a tenancy in common?

For two hundred years careful draftsmen intending to create a joint tenancy WROS have created instruments that quoted the statutory language;⁷ this case involves a less-careful—or perhaps bolder—draftsman, who used language making clear that the estates intended were joint tenancies WROS and not tenancies in common, but who eschewed or neglected the incantation of the statutory language. Nonetheless, I find that the statute is satisfied where the language used is consistent only with a joint tenancy WROS, and that the instruments in question here created such estates.

I. BACKGROUND

The pertinent facts can be stated briefly. Petitioner David L. Banks is the brother of

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Russell V. Banks,⁸ who died testate on July 4, 2012.⁹ Before Russell's death, the brothers together owned fifteen parcels of real estate (the “Properties”) in Sussex County, Delaware.¹⁰ The granting language of the deed to each parcel states that the property was conveyed to David and Russell as “joint tenants with right of survivorship.”¹¹ The Petitioner contends this language granted joint tenancies WROS, and that upon Russell's death, the Properties passed to him in full.

Respondent Mackie H. Banks serves as the executrix of the Estate of Russell V. Banks.¹² Mackie filed an Inventory for Russell's Estate on December 26, 2013; an Amended Inventory on August 11, 2014; and a Second Amended Inventory on March 18, 2015 (the “Inventory”) with the Register of Wills of the State of Delaware in and for Sussex County.¹³ The Inventory asserts, contrary to Petitioner's claim that he owns the Properties in full, that Russell's Estate holds a 50% ownership interest in the Properties.¹⁴ That is, the Respondents assert that the Properties were conveyed to the brothers not as joint tenants WROS, but as tenants in common.

The Petitioner filed a Petition to Quiet Title on the Properties on April 22, 2015, and filed an Amended Verified Petition to Quiet Title (the “Petition”) on May 5, 2015. The Petitioner seeks a declaration that the Properties were conveyed to David and Russell as joint tenants WROS, and that the Estate holds no interest in the Properties; an order requiring the Estate to file a corrected Inventory reflecting that it has no interest in the Properties; and an award of damages, costs, and attorneys' fees.

On August 3, 2015, the Petitioner filed a Motion for Judgment on the Pleadings. The Respondents filed a Cross–Motion for Judgment on the Pleadings on September 9, 2015. After briefing, I heard oral argument on the cross-motions on December 3, 2015, and asked for supplemental briefing, which is complete.¹⁵ This Opinion resolves those motions.

II. ANALYSIS

A. Legal Standard

The standard for judgment on the pleadings is well settled. Court of Chancery Rule 12(c) provides that, “[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.”¹⁶ A motion for judgment on the pleadings may be granted only where no material issue of fact exists, and where the moving party is entitled to judgment as a matter of law.¹⁷ “When there are cross-motions for judgment on the pleadings, the

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[C]ourt must accept as true all of the non-moving party's well-pleaded factual allegations and draw all reasonable inferences in favor of the non-moving party.”¹⁸ A judgment on the pleadings “is a proper framework for enforcing unambiguous contracts,”¹⁹ like those before the Court here, because there is “no need to resolve material disputes of fact.”²⁰

B. The Parties' Contentions

The parties do not dispute any underlying facts regarding the Properties; they disagree only as to the proper interpretation of 25 Del. C. § 701, and its resulting effect on the parties' ownership interests in the Properties. Section 701 reads in full:

No estate, in joint tenancy, in lands, tenements or hereditaments shall be held or claimed by or under any grant, devise or conveyance made to any persons, other than to executors or trustees, unless the premises therein mentioned are expressly granted, devised or conveyed to such persons, to be held as joint tenants and not as tenants in common.²¹

Specifically at issue is whether or not Section 701 should be read to require that the document of conveyance either quote the statutory language or, at minimum, recite both positive language, granting the property in joint tenancy, and negative language, stating that the property is not conveyed in tenancy in common, in order to create a joint tenancy WROS.

The Petitioner argues that the Respondents mistakenly claim an interest in the Properties by their assertion that the brothers owned the Properties as tenants in common. By contrast, the Petitioner contends that, because the deeds expressly state that Russell and David took the Properties as “joint tenants with right of survivorship,” the deeds unambiguously created joint tenancies WROS, and not tenancies in common. He asserts that redundant negative language disavowing a tenancy in common is not required—that is, that a “right of survivorship” is so clearly incompatible with a tenancy in common that Section 701, and the policy behind it, is satisfied by the language in the deeds to the Properties. In the alternative, the Petitioner contends that, regardless of whether the language “joint tenants with right of survivorship” is sufficient under Section 701 to create a joint tenancy WROS instead of a tenancy in common, the “survivorship” language cannot be ignored. Accordingly, the Petitioner asks the Court, at the least, to interpret the deeds as conferring a tenancy in common for life, followed by a contingent remainder in fee simple to the survivor. In either case, the Estate would take no interest in the Properties.

The Respondents, on the other hand, argue that Delaware case law demonstrates that both positive and negative language is required under Section 701 and that, even if such an interpretation leads to a result contrary to the parties' express...