Hughes v. Ephrem, 120025302E
| Decision Date | 16 December 2015 |
| Docket Number | 120025302E,A153439. |
| Citation | 365 P.3d 613,275 Or.App. 477 |
| Parties | Sharon HUGHES, Personal Representative of the Estate of Robert L. Hulen, and Kenneth O. Paddock, Plaintiffs–Appellants, v. Tina EPHREM and all Persons or Parties Unknown Claiming any Right, Title, Lien, or Interest in the Property Described in the Complaint, Defendants, and Rita Ephrem, a Person or Party Claiming an Interest in the Property Described in the Complaint, Defendant–Respondent. |
| Court | Oregon Court of Appeals |
Erin K. Olson argued the cause for appellants. With her on the briefs was Law Office of Erin K. Olson, P.C.
James N. Esterkin, Portland, argued the cause and filed the brief for respondent.
Before DUNCAN, Presiding Judge, and LAGESEN, Judge, and WOLLHEIM, Senior Judge.
Plaintiffs obtained judgments against defendant's daughter and then sought to enforce those judgments by execution against real property to which the daughter held legal title. Plaintiffs were the high bidders at a sheriffs' sale of that property, and they obtained a certificate of title. Based on that certificate, they filed this forcible entry and detainer (FED) action after defendant refused to vacate the premises. Defendant responded to the FED complaint by alleging that she had a right to continued possession based on a life estate that was created when she and her late husband conveyed title to their daughter by way of a quitclaim deed. The trial court agreed with defendant, ruling that defendant and her late husband, who were members of a Romani clan, had not intended for the beneficial interest in the property to pass to their daughter until after they had died, in accordance with traditional Romani inheritance practices. Thus, the court concluded that defendant had retained an equitable interest in the property, notwithstanding the unqualified nature of the quitclaim deed.
On appeal, plaintiffs challenge the trial court's conclusion that defendant had an equitable interest in the property that was sufficient to defeat plaintiffs' right to possession. For reasons that we will explain, we conclude that the trial court failed to make a critical factual finding on an issue to which it alluded but that it did not conclusively resolve in its ruling: defendant and her late husband's motives in deeding the property to their daughter. If, as plaintiffs' evidence suggests, the property was transferred to avoid creditors—an objective that presumably would involve an immediate rather than a future transfer of the beneficial interest in the property—that fact would undermine the trial court's finding that defendant and her late husband had not intended the quitclaim deed to transfer their ownership of the property, as well as its ultimate conclusion on the equitable defense. Because the trial court is in the best position to resolve that factual question, we vacate and remand the judgment for further proceedings.
The facts immediately preceding the filing of this FED action are undisputed. Plaintiffs, who were the victims of theft by Tina Ephrem, obtained judgments against her for elder abuse.1 Tina held title to property located at 3345 NE 126th Avenue in Portland, Oregon, and plaintiffs thereafter sought a writ of execution from the circuit court directing the sheriff to sell that property to satisfy the judgments. Tina's mother, Rita Ephrem, who is the defendant in this case, objected to the proposed sale and, at a hearing, informed the circuit court that she had a possessory interest in the property that was not subject to the sale. The circuit court ordered an execution sale by the sheriff, but it limited the sale to Tina's interest in the property.
At the sheriff's sale, plaintiffs were the highest bidders and obtained a sheriff's certificate of judicial sale. The certificate stated that plaintiffs had purchased "all interest of Tina Ephrem in the real property." Plaintiffs subsequently commenced this FED action when defendant refused to vacate the premises or pay rent pending the expiration of the redemption period. In their complaint, plaintiffs alleged that they were entitled to possession under ORS 18.946(1), which provides that "the purchaser of real property at an execution sale is entitled to possession of the property from the date of sale until a redemption of the property, if any." Defendant then filed an answer in which she alleged that
At the beginning of the bench trial, the parties stipulated to the admission of certain exhibits, including the sheriff's certificate of sale, and also agreed that plaintiffs' evidence made out a prima facie case for possession of the property under FED laws. Through a colloquy with counsel, the trial court then narrowed the case to two overarching issues: (1) whether the existence of a resulting trust is something that could be raised as a defense in an FED action; and (2) assuming that it could, whether defendant proved that defense by clear and convincing evidence, which the parties agreed was her burden.
The trial court ruled on the first issue early in the proceedings, concluding that "the defense has the right to seek a resulting living trust within the confines of this FED proceeding." Defendant then proceeded to put on her evidence, which, for purposes of our disposition, we need only summarize generally. Defendant offered evidence that she and her late husband, Lee Ephrem, were traditional members of the Kalderash, a subgroup of the Roma ethnic group. They had six daughters together, the youngest of whom was Tina. In 1976, the Ephrem family moved into the home at 3345 NE 126th Avenue, and defendant and Lee acquired title to the property in 1987.
In November 1990, when Tina was age 15, Lee and defendant executed and recorded a quitclaim deed in which they conveyed to Tina "all of [their] right, title and interest" in 3345 NE 126th Avenue, to "have and to hold the same unto the said grantee and grantee's heirs, successors and assigns forever." A year and a half later, Lee and defendant sought and obtained a conservatorship for Tina. The petition stated that appointment of a conservator was necessary "because Petitioners transferred real property to the minor child on November 26, 1990 upon advice of an attorney that minors could hold property without any further proceedings."
Defendant and plaintiffs offered conflicting theories about why that transfer to Tina occurred. Defendant testified that she and Lee had conveyed the property to Tina in accordance with the Romani custom that property passes to the youngest child upon the death of the parents, but that Tina would not have control of the property during their lifetimes. Defendant also offered testimony from Dr. Carol Silverman, an anthropologist and expert in the subject of the Romani culture, to describe how property is passed among traditional Romani. Silverman explained that the youngest child in a Romani family has a special relationship with the parents: The youngest child customarily receives property upon the death of the parents, but is also expected to care for the parents if they become infirm.
Silverman testified that the Romani avoid the American legal system when possible and typically do not execute wills to pass property. Deeds, if executed, are for the security of the youngest child, but the Romani understanding is that, regardless of the deed, "it is the parents' house while the parents are alive, because age and respect, and ownership go along the hierarchy of age."
Plaintiffs, meanwhile, offered exhibits and elicited testimony on cross-examination to suggest that Lee and defendant had a different purpose for the quitclaim deed than to provide for Tina's future inheritance. Plaintiffs offered evidence that, at the time of the conveyance in November 1990, Lee and defendant were in financial distress, including from trust deeds for two unsatisfied loans to purchase the property; a federal tax lien in the amount of $11,330.51, which was recorded by the Internal Revenue Service (IRS) in 1989; a subsequent IRS tax lien, recorded in 1991, in the amount of $105,154.70 for the tax period ending December 31, 1987; unpaid state taxes; a $22,000 loan from Beneficial Oregon, Inc., which was secured by a deed of trust to the property that was recorded June 21, 1990; and unpaid medical bills of more than $10,000 for services rendered in 1985. Plaintiffs also produced evidence that Lee's father had deeded property to his youngest son but had done so by conveying title as joint tenants with a right of survivorship, not with a quitclaim deed as Lee and defendant had done.
After taking the matter under advisement, the trial court issued a letter opinion that ruled in defendant's favor. The opinion stated that "[t]he only issue for me to decide is whether the law and the evidence support the formation of an equitable device, such as a resulting trust which creates the equivalent of a life estate in the property for the benefit of [defendant]." The court then explained its reasoning:
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