Frazier v. Pomeroy, No. M2005-00911-COA-R3-CV (Tenn. App. 12/7/2006), M2005-00911-COA-R3-CV.
| Decision Date | 07 December 2006 |
| Docket Number | No. M2005-00911-COA-R3-CV.,M2005-00911-COA-R3-CV. |
| Parties | MICHAEL FRAZIER, ET AL. v. HOWARD POMEROY, ET AL. |
| Court | Tennessee Court of Appeals |
Appeal from the Chancery Court for Davidson County; No. 03-1178-III; Ellen Hobbs Lyle, Chancellor.
Judgment of the Chancery Court Affirmed.
Lawrence D. Wilson, Nashville, Tennessee, for the appellants, Howard and Edna Pomeroy.
Todd E. Panther, Nashville, Tennessee, for the appellees, Michael and Deborah Frazier.
Patricia J. Cottrell, J., delivered the opinion of the court, in which William C. Koch, Jr., P.J., M.S., and William B. Cain, J., joined.
The plaintiff husband and wife entered into a series of transactions with the wife's parents that resulted in all the parties living together in property titled jointly to both couples. This dispute arose over the distribution of proceeds from the sale of that property after a falling out between the couples. The trial court, making extensive findings of fact and a thorough accounting, split the proceeds equally, but awarded the plaintiffs their equity in a house previously owned by the defendants, but occupied by the plaintiffs. Because the trial court's findings are supported by the evidence, we affirm.
This case involves an intrafamily dispute arising from a series of transactions between, on one hand, Dr. Howard Pomeroy and his wife, Edna Pomeroy, and, on the other, the Pomeroys' daughter and her husband, Michael and Deborah Frazier. The dispute is over entitlement to funds deposited with the trial court that resulted from the sale of real property in which both parties claimed an interest.
Before the transactions that form the bases of the claims herein, Dr. and Mrs. Pomeroy owned and lived in a three-level condominium, #55 Rich Meade Condominiums. Dr. Pomeroy broke his leg and, as a consequence, the Pomeroys decided to move to a single-floor unit. They purchased and moved into unit #89. The Pomeroys' daughter, Deborah Frazier, and her husband Michael then moved into Unit #55, which the Pomeroys still owned. The Fraziers later obtained financing for the remaining debt on Unit #55, which was then titled in their own names. The Fraziers subsequently had a child and felt they needed a larger home. They also discussed with the Pomeroys the possibility of all of them living together, and they agreed to look for a house that might make this possible.
In April of 1989, the Fraziers and the Pomeroys became interested in a house on Buffalo Road which was to be auctioned off. Both couples looked at the property and liked it.1 The Fraziers attended the auction and called the Pomeroys while it was still going on, and the Pomeroys agreed to purchase the house for $162,000 with seller financed terms. Mr. Frazier signed the auction contract. He provided a personal check for $24,300 to the auctioneer, and the next day Mr. Frazier and Mrs. Pomeroy went to her bank and withdrew $ 24,300, which was exchanged for the check. Mr. Frazier contributed an additional $16,200, which he obtained from his mother, toward the closing costs for the house. The Buffalo Road property was deeded to Dr. and Mrs. Pomeroy, and they made payments under the original seller-financed sales contract in 1989 of approximately $20,000. In February of 1990, Mr. Frazier arranged for a new mortgage in the amount of $120,000.
From April 1, 1990, until February, 1991, the Pomeroys made the monthly mortgage payments. Mr. Frazier filed a bankruptcy petition in October, 1990. Starting in February, 1991, the Fraziers began making some payments to Dr. Pomeroy which were used to defray the mortgage payments. In September, 1993, the Fraziers began making the monthly mortgage payments directly to the mortgage company. This practice continued until the house was sold in May, 1998.
By 1997, Dr. Pomeroy's health had deteriorated, and it was agreed by all parties that the Fraziers would live with the Pomeroys and assist in his care. In October of 1997, the Pomeroys purchased a residence at Darden Place, using a $100,000 bridge loan, a life insurance policy, and other cash. The Buffalo Road house was sold in May, 1998, with a net of approximately $275,000 remaining after the mortgage and other expenses were paid. The Pomeroys received all the profits from the sale and used some of them to pay off the bridge loan for the Darden Place house.
A few months after they moved in with the Pomeroys, the Fraziers informed the Pomeroys they would not stay unless their names were added to the deed on the Darden Place house. On June 23, 1998, Dr. and Mrs. Pomeroy executed a quitclaim deed conveying the Darden Place property to the Fraziers and the Pomeroys as tenants in common. On the same day, the parties refinanced the Darden Place property, making both the Pomeroys and the Fraziers liable for the debt. The proceeds from the refinancing went to the Pomeroys to repay their investment in the property.
During the next four years, the families lived together at Darden Place. They each deposited funds monthly into a joint household account, with the Fraziers paying slightly more than the Pomeroys, since their son also lived there. The mortgage and other expenses were paid from this account.
In the spring of 2001, the parties established a home equity line of credit in the amount of $200,000. The first draw was for $60,000, which was deposited into the joint household account and paid equally to the couples through $30,000 checks to each.2 That practice was continued in that equal distributions were always made of any proceeds drawn from the line of credit. Some draws were made to pay for renovations made to the property in 2002.
All was well in the Darden Place home until the summer of 2002. At that time, for various and disputed reasons, Dr. Pomeroy moved out of the house.3 Mrs. Pomeroy moved out in early 2003. In April of 2003, Mr. Frazier withdrew $22,500 of the remaining available money in the line of credit because he learned that Dr. Pomeroy had inquired about withdrawing the balance. Mr. Frazier later deposited these moneys with the court when this lawsuit was filed.
The Fraziers went on vacation to Europe in April of 2003, and while they were gone, Mrs. Frazier's sister stayed at the Darden Place home with the Fraziers' son. The Pomeroys returned to the Darden Place house on April 23 with the intent of taking up residence there again. The Fraziers filed a complaint requesting a temporary restraining order to prevent the Pomeroys from "residing in or entering upon" the property and the court granted the order. The Pomeroys vacated the premises.
The complaint filed by the Fraziers sought partition of the property and other damages. The Pomeroys counter-claimed. The trial court ordered both sets of parties to deposit all proceeds from the line of credit and joint household account. After the parties were unable to agree on the disposition of the Darden Place property or the personal property therein, and in response to various motions, the trial court ordered the Darden Place Property be sold at auction. Mr. and Mrs. Frazier purchased the house at the auction and deposited the net proceeds from the sale of the house with the court.
After a number of amendments and attempted amendments to the pleadings, the case went to trial. The Pomeroys asserted they had signed the quitclaim deed making the Fraziers tenants in common with them on the Darden Place property on the condition that the Fraziers take care of them, to keep them from having to go into a nursing home. They also asserted that they believed the transfer of interest would only take effect at their death and that at that time the Fraziers would own one-half interest in the property and the Pomeroys' other children would inherit the other one-half interest.
The Fraziers denied that any such conditions had been placed on their interest in the Darden Place property. They asserted that their interest arose from the financial contributions they made to the cost of the property, including their share of profits from the sale of the Buffalo Road property. While that property had been titled solely in the names of the Pomeroys, the Fraziers argued they had contributed substantially to it, including making two-thirds of the mortgage payments.
The Pomeroys argued that the Fraziers should be judicially estopped from claiming an interest in the Buffalo Road property, since Mr. Frazier had not included any such interest in his 1990 bankruptcy filings.
This case resulted in a four day trial and produced a voluminous record. The trial court meticulously set out the issues and the evidence in a thorough memorandum and order filed January 13, 2005. After various post-judgment motions, a final order was entered March 14, 2005. As the trial court stated, by the time the case went to trial the only remaining issue was how to allocate between the Pomeroys and the Fraziers the money deposited with the clerk, at trial time totaling $ 154,463.57. This amount was comprised of the proceeds from the sale of the Darden Place property and moneys from the joint account and the line of credit. The question of how to deal with the Fraziers' contributions to the Buffalo Road property was an included issue.
The trial court found that the preponderance of the evidence supported the Fraziers' claims and awarded them 50% of the funds on deposit with the court with prejudgment interest, $57,877.29 for their equity in the Buffalo Road property, and $2,905.78 for Darden Place expenses from April to August of 2003. The trial court made a number of findings of fact.
With regard to the Buffalo Road property, the court found it was titled in the Pomeroys' name because the Fraziers could not afford it at that time, but needed a larger home. It was understood by all the parties that the Fraziers would live in the house and improve it. It was also ...
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