Benson v. Carver
| Decision Date | 26 May 2008 |
| Docket Number | No. 07-1021.,07-1021. |
| Parties | Kenneth Benson, Attorney-in-Fact for Gloria Koniar, Plaintiff, v. Steven Reed Carver, Karla Joy Carver William Ross Berggren, Mary Ann Berggren, Joshua Lee Mason, Heidi Lyn Mason, House of Trades, LLC, Carolyn Orttel, John Doe and Mary Roe Defendants. |
| Court | Minnesota District Court |
Stewart Loper, Esq., appeared for and on behalf of Plaintiff.
Mark Steffenson, Esq., appeared for and on behalf of Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
The above entitled matter came before the Honorable Gary Larson, Judge of Hennepin County District Court, on September 10, 2007 on Defendants' Motion for Summary Judgment.
1. Defendants Karla Joy Carver and Mary Ann Berggren's Motion for Summary Judgment is GRANTED.
2. The remaining Defendants', Steven Reed Carver, William Ross Berggren, Joshua Lee Mason, Heidi Lyn Mason, and Carolyn Orttel, and House of Trades, LLC, Motion for Summary Judgment is DENIED.
3. That the attached memorandum shall be made a part hereof.
MEMORANDUMGloria Koniar ("Mrs. Koniar") resides in a duplex at 1521 Marshall Street N.E., Minneapolis, Minnesota ("1521 Marshall"). Prior to the transaction at issue in this case, Mrs. Koniar and her husband Joseph Koniar ("Mr. Koniar") were the full fee owners of 1521 Marshall. Mr. Koniar died in November, 2004. The Koniars have one daughter, Sharon, who currently lives with Mrs. Koniar at 1521 Marshall. Sharon is mentally and physically disabled and cannot fully take care of herself or live on her own. Mrs. Koniar takes care of Sharon.
Mrs. Koniar receives a pension of $202 per month on behalf of her husband, Social Security of $937 per month, and annuity payments of $655. Sharon also receives Social Security-Disability payments and employment wages. Mrs. Koniar applied this income to pay for the utilities, insurance and property taxes at 1521 Marshall.
The Defendants are involved with the Plaintiff through their familial relationship with Defendant Carolyn Orttel ("Orttel"). Orttel, who is a co-conservator of the estate of Sharon Koniar, also acted as an "authorized representative" of Mr. Koniar. Orttel is the mother of Defendants Heidi Mason and Karla Carver. Defendant Steven Carver is married to Karla Carver. Defendant Joshua Mason is married to Heidi Mason. Mason and Carver, along with Defendant William Berggren, an attorney, own House of Trades, LLC. ("House of Trades"). Berggren is married to Defendant Mary Ann Berggren. House of Trades is a company engaged in the business of acquiring real property, improving it, and leasing or selling it for profit. Kenneth Benson is Mrs. Koniar's nephew and attorney-in-fact.
Prior to April, 2003, Mrs. Koniar and her husband owned 1521 Marshall free and clear of mortgages and other encumbrances. In early 2003, Mrs. Koniar mentioned to Orttel that she felt unsafe in her house because of a recent shooting in her neighborhood, and that she would like new front doors for added security. Orttel suggested that Mr. Mason and Mr. Carver could replace the doors for her. Mr. Mason later replaced the doors. The cost of the doors and installation exceeded $1,000 dollars. Pleased with the new doors, Mrs. Koniar mentioned to Mr. Mason and Mr. Carver that she had other work on her house that she was hoping to have done. Stemming from this conversation, Mr. Karver discussed Mrs. Koniar's situation with a mortgage lender. The mortgage lender was apparently unable to obtain financing for Mrs. Koniar. The extent to which the mortgage lender considered Mrs. Koniar's full financial picture is not clear. Mr. Carver, a licensed real estate agent, indicates that he consulted with a mortgage lender about obtaining financing for repairs to the Koniar residence, but he cannot remember the lender's name. Furthermore, he did not collect detailed financial information from Mrs. Koniar, but told her that the unidentified lender determined that she was not qualified for a loan. He did tell her, however, that the only way to finance the improvements to her house was to deed the property to him and his business associates.
Apparently, led to believe that she couldn't obtain financing on her own, Mrs. Koniar considered a transaction proposed by the Defendants and the mortgage lender, wherein she would transfer title to 1521 Marshall to the Defendants and in exchange be entitled to: 1) live there for the rest of her life and 2) that the Defendants would provide her with personal care service. Accordingly, Mr. Berggren drafted a Quit Claim Deed that, for $1,000.00 consideration, was to transfer full title to Mr. Mason and his wife, Mr. Carver and his wife, and Mr. Berggren and his wife. The Quit Claim Deed, however, made no mention of Mr. Koniar and his interest in the property, and did not reserve to the Koniars a life estate in the property. Mrs. Koniar signed the Quit Claim Deed drafted by Mr. Berggren, but the Hennepin County Recorder did not allow for it to be recorded because Mr. Koniar was not named as a grantor on the Quit Claim Deed. Mr. Carver, rather than having Mr. Berggren re-draft the instrument, drafted a new Quit Claim Deed that includes Mr. Koniar as a grantor. The Quit Claim Deed was signed by Mrs. Koniar on April 20, 2003. The consideration recited in the Quit Claim Deed was one thousand dollars ($1,000). The Quit Claim Deed did not mention any of the other consideration proposed by Defendants—reservation of a continued right to live in the property or personal services. To date, Defendants have not actually paid $1,000 to Mrs. Koniar—they claim, however, that the front door that was installed offsets the $ 1,000. At the time of the property transfer, Ms. Koniar was eighty-one (81) years of age, she was not represented by legal counsel, and the Defendants, including the attorney Berggren, did not suggest to her that she should seek legal counsel to conduct this complicated transaction.
Three months later, Mr. Carver drafted another Quit Claim Deed transferring title in1521 Marshall to Mr. Mason. Thus, title passed from the Koniars to Mr. and Mrs. Berggren, Mr. and Mrs. Mason, and Mr. and Mrs. Carver to Mr. Mason. This was apparently done so that the necessary mortgage financing could be secured, which would allow for the Defendants to make property improvements and repairs. On July 24, 2003, Mr. and Mrs. Mason secured a mortgage on the property in the amount of $105,000.00. On September 3, 2003, the Masons refinanced the property with TCF National Bank for $165,000.00. Again, on July 26, 2004, the Masons refinanced the property with Countrywide Bank for $280,000.00.
On October 16, 2003, nearly six months after Mrs. Koniar signed the Quit Claim Deed, and approximately three months after the original six grantees granted the property to Mr. Mason, Berggren drafted a memorandum, which purports to document the terms for the property transaction that took place in April, 2003. The terms of this memorandum stated that the property would be sold for $1,000 and other valuable consideration, including: 1) cleaning of the main floor, the upstairs floor, the attic and the basement; 2) Remodeling the main floor, the upstairs floor, the attic, and the basement at a material cost of at least $75,000 plus the cost of labor; 3) allowing Mrs. Koniar the use of the house as a residence for as long as she desires at no cost; 4) having the Masons live at the property and provide companionship and some assistance; 5) maintaining the property as a rent-free residence for Mrs. Koniar for as long as she may desire to use it as such, even if she left it for a period of time. This agreement was signed only by Mr. Carver, Mr. Mason, Mr. Berggren, and Gloria Orttel.
The Masons agreed to "provide companionship and some assistance" pursuant to a separate Service Agreement ("Service Agreement"), under which they would provide Mrs. Koniar the following services: shopping for groceries, food, medicines, and other necessities; shopping for and purchasing personal items and incidentals; holiday shopping; assisting with activities of daily living as necessary; overseeing health care; transportation services for visits to doctors, dentists, psychologists, podiatrists, and other health care providers; transportation services for recreational, religious, and social purposes; providing recreation and companion services; changing and cleaning storm windows and screens; yard maintenance; snow shoveling; home maintenance and repairs; transportation to doctor and other appointments; and housekeeping. This agreement was dated November 24, 2004.
After the Masons moved into 1521 Marshall, Mr. Mason began working on the house. Of the work performed, he accounted that he paid $76,000 for the costs of materials to improve the property, $8,800 to pay contractors, and $84,400 for his own labor. The work included replacing the flooring, painting, replacing cabinets and appliances, replacing bathroom fixtures, and performing electrical and plumbing work. Along with the improvement work, the Masons performed under the service agreement. According to Mrs. Koniar, the Masons generally performed their service agreement obligations. In 2006, because the Masons wanted to begin a family and move, the Masons sold the property to Kristian Oyen, who assumed the Masons' duties under the Service Agreement. Mrs. Koniar did not object to Mr. Oyen assuming the duties and has been satisfied by Mr. Oyen's performance under the assigned contract. The proceeds of the sale were used to pay off the mortgage taken out to pay for the property improvements and the remainder of the proceeds was placed in an account to pay Mr. Oyen rent for allowing Mrs. Koniar to live in his house. Rent to Mr. Oyen was $1,000 per month. Defendan...
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