Ellison v. Fry

• Decision Date: 23 September 2013
• Docket Number: No. SD32120,No. SD32188,SD32120,SD32188
• Citation: Ellison v. Fry, No. SD32120, No. SD32188 (Mo. App. Sep 23, 2013)
• Parties: MARY ELLISON, ARTHUR FRY, DAVID FRY and SUSAN SLEEPER, Appellants/Respondents, v. J.D. FRY, deceased, by LINDA FRY, TRUSTEE OF THE JOHN DELBERT FRY REVOCABLE INTERVIVOS TRUST, et al., Respondents/ Cross-Appellants.
• Court: Missouri Court of Appeals

MARY ELLISON, ARTHUR FRY, DAVID FRY and SUSAN SLEEPER, Appellants/Respondents, v. J.D. FRY, deceased, by LINDA FRY, TRUSTEE OF THE JOHNDELBERT FRY REVOCABLE INTERVIVOS TRUST, et al., Respondents/ Cross-Appellants.

No. SD32120

No. SD32188

Missouri Court of Appeals Southern District Division One

FILED: September 23, 2013

APPEAL FROM THE CIRCUIT COURT OF CAMDEN COUNTY

Honorable Ralph H. Jaynes, Senior Judge

REVERSED AND REMANDED

On interlocutory appeal,¹ we consider a judgment, several verdicts, and various claims in a family dispute over property once owned by decedents Vincil and Willa Fry. We find that several of these claims were time barred. Others were, in effect, against the wrong party. We reverse the judgment and remand.

Background

The record is extensive. We tersely summarize allegations, matters, and background spanning more than 30 years.² Parties and persons of interest include:

• Vincil and Willa Fry, husband and wife, who farmed and jointly owned a 160-acre home place and an adjacent 200 acres.

• Their adult children Arthur, Mary, and J.D.

• Arthur's adult children Susan and David.

• J.D.'s wife Linda and their adult son Delbert, who along with J.D. did business as Fry Grain.

In 1981, Vincil and Willa purportedly made a joint will as follows: home place to J.D.; the 200 acres to Susan and David subject to a life estate in Arthur; a third tract and cash to Mary; and remaining assets divided equally among Mary, Arthur, and J.D.

In June 1990, at age 82, Vincil wrecked a car and injured its occupants. Although fully insured, he and Willa fretted about losing their farm. J.D. took them to an attorney. On June 28, 1990, Vincil and Willa executed new wills; settled a trust to benefit Arthur, Susan, and David; and deeded one farm to J.D. and the other to Delbert, reserving life estates for themselves. Later, they made separate provision for Mary.

Vincil passed away in 2000. After Willa died in November 2005, her monies were divided between her children. No probate estates were opened.

In April 2008, Mary sued to set aside the 1990 farm conveyances to J.D. and Delbert, alleging that

[s]aid conveyances were made solely as a result of the undue influence, coercion and deception practiced upon Vincil and Willa Fry by J. D. Fry for the purpose of securing title to said real estate for himself and his child, and depriving [Mary and Arthur] of such interests therein as they would have otherwise inherited upon the death of the last to die of Vincil and Willa Fry.

Mary also charged J.D. with breach of fiduciary duty, fraud, conversion, and unjust enrichment for alleged misdealing with his parents' monies and personal property from and after 1998. She made a conversion claim against Fry Grain as well.

Not joining in Mary's petition, Arthur purported to settle and fully release, in writing, any potential claims.

J.D., who had been failing, died six months after Mary sued him. Mary moved to substitute J.D.'s daughter "as Defendant in the place and stead of said J.D. Fry."³ Citing § 537.021.1(2), the defense countered that the proper and only permitted substitute would be J.D.'s personal representative. After a hearing, the trial court substituted Linda, as trustee of J.D.'s revocable trust ("Trustee"), in place of J.D. As with Vincil and Willa, no probate estate was opened for J.D.⁴

In October 2011, Arthur, Susan, and David intervened and joined Mary in filing a ten-count amended petition. Defendants filed counterclaims that the court severed; those are still pending.

Plaintiffs' claims were tried to a jury for five days in April 2012. At the end of Plaintiffs' case, the court⁵ dismissed Arthur's claims based on his release, dismissed claims against Delbert, and ruled that the evidence did not warrant punitive damage instructions. At the close of all evidence, the court dismissed the count against Fry Grain.

Jurors were instructed "that defendant J.D. Fry is deceased and [Trustee] has been substituted to take his place; therefore if you find against defendant J.D. Fry, your verdict must be against [Trustee]." Of six verdicts rendered, three are at issue:

• Mary's $35,000 verdict against Trustee for J.D.'s breach of fiduciary duty, fraud, conversion, and/or unjust enrichment.

• Two $5,500 unjust enrichment verdicts, one for Susan and the other for David, that hinged on allegations that J.D.'s 1990 deed was the result of undue influence.

The court entered a judgment consistent with these verdicts and certified, per Rule 74.01(b), that there was no just reason for delay.

Both Plaintiffs and Defendants have appealed, raising 11 points between them. We start with Defendants' appeal, wherein our disposition of two points makes it unnecessary to reach the others.

Defendants' Point II — Limitations as to Susan and David

We agree with Defendants: the claims by Susan and David were time barred. These plaintiffs never acquired the rights of action they purported to assert. We start from two cases: Turnmire v. Claybrook, 204 S.W. 178 (Mo. 1918); and Pemberton v. Reed, 545 S.W.2d 698 (Mo.App. 1976).

Turnmire v. Claybrook

J.H. and Sarah Claybrook deeded land to their son Samuel in 1900. J.H. died in 1903, Sarah in 1913. In 1914, Samuel's siblings sued to set aside the deed for fraud and undue influence. Our supreme court affirmed dismissal based on the ten-year statute of limitations for recovery of land.

The court held that the statute of limitations was triggered against J.H. in 1900 when Samuel took the deed, and "having begun to run, would not be stopped by the death of [J.H]. His heirs would succeed to his rights, but would take them with the burdens imposed by law. The statute of limitations, once set in motion, cannot be stopped." Turnmire, 204 S.W. at 179-80. "[T]he statute of limitations, which began to run in [J.H.'s] lifetime, barred such rights in his heirs long prior to the bringing of this action. His right of action accrued upon the delivery and acceptance of the deed in 1900, and this action was not brought until 1914." Id. at 180.

Under married women's laws of that era, Sarah was protected from limitations until J.H. died.⁶ Still, the court noted, "suit was not brought for nearly 11 years thereafter. What we have said of the heirs of the husband supra is equally applicable to the heirs of the wife." Id. The passing of ten years without action by or on behalf of either grantor spouse barred their children's later action. Id.

Pemberton v. Reed

A similar result was reached nearly 60 years later, despite a limitations period much longer than in Turnmire or this case.

Maggie and Cora Pemberton, sisters, owned land in joint tenancy. In 1946, they deeded it to defendants Reed for no consideration, keeping a life estate. Cora died the following year, but Maggie lived until 1974. Two months after she died, relatives challenged the deeds for mental incapacity of the sisters and undue influence by the grantees.

It was agreed that both sisters were incompetent when they signed the deeds, which stretched limitations to 24 years. Pemberton, 545 S.W.2d at 700.⁷ When death overtook Cora, the right of action fell solely to Maggie as surviving joint tenant, but "expired altogether" before Maggie passed away in 1974. Id.

The plaintiffs conceded this, but urged that their cause of action "did not arise until they had an immediate right of possession, which accrued to them upon the death of Maggie." Id. at 701.

The court on appeal disagreed. If Maggie's right to sue expired before she died, her heirs never acquired a cause of action. Id. at 701-03. "While Maggie lived, the plaintiffs as prospective heirs had no vested interest in her property and could not have challenged [her conveyances]." Id. at 702. They could not sue in their ownright, but claimed only through Maggie as heirs, standing "in the same relation to the grantee as did the grantor." Id. "Their right to set aside the deeds is derived from Maggie." Id. Since Maggie had no right to sue when she died, "the plaintiffs have no cause of action to pursue." Id. at 703.

Application to This Case

Under the foregoing cases and others,⁸ the right to contest these farm deeds accrued to Vincil and Willa, and the statute of limitations started, in June 1990. Any unexpired right at Vincil's death remained in Willa with the statute still running. That statute, whether five, ten, or 15 years,⁹ expired before Willa's death in November 2005.

Plaintiffs' Tolling Theory Fails

Specifically citing § 516.120(5), Plaintiffs claim that "any statute of limitations concerning the 1990 Deeds was tolled due to J.D. Fry's active concealment of the facts concerning his fraud." This may be true, but only to a point. At most, there were 15 years after June 1990 to sue, despite any fraudulent concealment. To quote a fraction of this court's extensive analysis in Anderson v. Dyer, 456 S.W.2d 808, 811-12 (Mo.App. 1970):

The initial segment of Sec. 516.120(5) is simply a statute of limitations which imposes a five year limit on the commencement of actions brought for relief on the ground of fraud; the concluding portion constitutes a ten-year artificial lacuna fixed by the legislature on the accrual of the cause of action, i.e., fraud actions are deemed not to accrue during the ten-year suspension period until the discovery of the fraud.... If the fraud was not discovered or discoverable during the ten-year hiatus provided by the legislature, then the cause of action would be deemed to have accrued at the termination of such period and the statute of limitations would commence to run from that time, thereby permitting a maximum of fifteen years for commencement of the suit. [citations and quotation marks omitted]

"In other words, 'the action is to be brought within fifteen years in any event...."' Id. at 812 (quoting Foster v. Pettijohn, 213 S.W.2d 487, 490 (Mo. 1948)).

Our supreme court agrees, having quoted Anderson at length in confirming that if "ten years elapse without discovery of the fraudulent acts, the...