King v. King, No. PC No. 04-1539 (R.I. Super 2/12/2007)

• Court: Rhode Island Superior Court
• Writing for the Court: Procaccini
• Decision Date: 12 February 2007
• Docket Number: No. PC No. 04-1539.,PC No. 04-1539.
• Citation: King v. King, No. PC No. 04-1539 (R.I. Super 2/12/2007), No. PC No. 04-1539. (R.I. Super. Feb 12, 2007)
• Parties: GARY A. KING v. DAVID M. KING, and CAROL M. KING

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GARY A. KING v. DAVID M. KING, and CAROL M. KING

No. PC No. 04-1539.

Superior Court of Rhode Island.

Providence, S.C.

Filed: February 12, 2007.

DECISION

PROCACCINI, J.

Before the Court for decision is Plaintiff's suit seeking specific performance of an agreement reached for the purchase of Defendants' real estate located in Glocester, Rhode Island. For the reasons set forth herein, judgment is rendered in Plaintiff's favor. Jurisdiction is pursuant to G.L. 1956 § 8-2-13.

Facts and Travel

This is a story of changed minds and broken promises of the worst kind—between parents and children. This Court has been thrust into a maelstrom of competing claims about what was said or done between parents, David M. King and Carol M. King ("David," "Carol," or, collectively, "Defendants"), and one of their children, Gary A. King ("Gary" or "Plaintiff"), regarding an agreement for Plaintiff to purchase the family farm.¹

While the Court is duty bound to resolve this matter, it does so reluctantly knowing that whatever is decided may only result in greater animosity and resentment within this family. Notwithstanding numerous pre-trial efforts to forge an acceptable resolution in this matter, the Court's hand has been forced to decide this unfortunate family feud.

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Based on testimony and evidence adduced at a bench trial beginning October 22, 2005, the Court makes the following findings of fact. Defendants, David M. King and Carol M. King, purchased the Property in 1970 or 1971 and the family made their home in the farm house. Plaintiff Gary King, one of three King children, was aged ten when the family moved to their new residence. During the 1980's, Defendants carved out lots from the land for each of their children and deeded a lot to their daughter and one to another son. At that time, Plaintiff declined a gift of a similar lot, saying instead that he would some day purchase the whole of the remaining Property. As an adult, Plaintiff lived and worked elsewhere but in 1989 returned to live in a garage apartment on the property and work with his father at a family business operated out of that garage. A "for sale" sign then remained on the Property and prompted discussions between Gary and David regarding Gary's purchase of the Property; David then removed the sign.

The disputed fruits of those discussions, which continued for several years, are the dispositive issue in this case. In 1989 or 1990, David and Gary reached an oral agreement that Gary would take over the mortgage on the Property outstanding with the Pawtucket Credit Union (PCU), pay the taxes and insurance thereon, and pay an additional sum to Defendants, at which time they would deed the Property to Plaintiff. It is not clear if Carol was aware of this agreement at the time, but she admitted at trial that, in 1992, she and her husband had reached such an agreement with Gary. By 1992, Defendants no longer lived on the Property, keeping a winter home in Florida and bringing a recreational vehicle to Rhode Island for part of the year, when they stayed at their daughter's home adjacent to the Property. Plaintiff was then in sole possession of the Property, having moved from the garage to the house, and operating the business.

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Despite some murkiness as to specific dates, the parties are in substantial agreement with the above facts. A point of contention, however, is the amount of the final payment Gary was to make to complete the purchase. Plaintiff asserts that an understanding was reached that the figure would be $200,000, whereas David testified that $200,000 was an amount Gary stated he could afford, but which Defendants found unacceptably low. It is relevant to note that the parties understood that Gary was not at that time in a financial position to close the deal by paying the cumulative sum, but would rather continue his residence—maintaining the Property and servicing the mortgage, taxes, and insurance—until he could close at a later date.

Beginning in 1996, Plaintiff has been making mortgage payments due on the Property. Carol prepared a "Leasing Agreement" dated September 1, 1997, the body of which is set out in the margin, representing the first writing to memorialize the parties' agreement (Plaintiff's Exhibit 3, hereinafter referred to as "1997 memorandum").² The memorandum bears the signatures of Plaintiff, his wife, and Defendants. Despite its title, the memorandum clearly contemplates Gary's obligations "as a down payment towards purchase of home." Id. It does not state a purchase price for the Property, nor does it give a closing date. The PCU mortgage remained in Defendants' name after Plaintiff commenced making payments, and remains in Defendants name today. Defendants allege that late fees were assessed after Plaintiff took over the mortgage payments, while Plaintiff testified that payments were already behind when he received the account book. Defendants also claim that on a number of occasions after the agreement, they made past due tax and insurance payments on Plaintiff's behalf, as well as a large payment of over $4,000 to PCU when informed the mortgage was in default in July of

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1998. During Carol's testimony, a notebook was presented into evidence that she claims to have kept as a contemporaneous listing of these payments. Some of the dated entries were out-of-sequence, however, and the surrounding testimony appeared contrived and was not persuasive to this Court. The Court does accept Plaintiff's testimony that he gave money to Carol to cover some bills paid by Defendants. Although the evidence presented to the Court leaves wanting a full accounting of all monies paid and received by the parties, Defendants testified that Plaintiff kept up his end of the bargain. More importantly, Defendants testified at trial that, during the 1990s, at no time did they inform Plaintiff the agreement was void due to delinquencies in Plaintiff's payment obligations. In fact, the parties agree that Defendants, at least yearly, would reiterate their agreement and desire that Plaintiff close the purchase.

Since taking sole possession of the Property, Plaintiff has expended a great deal of resources and labor on the maintenance and improvement of the Property. Plaintiff performed and/or paid for ordinary maintenance and repairs on the land and structures, such as seven acres of grass-cutting, plumbing work, electrical work, boiler repairs, and chimney maintenance. When present on the Property, David sometimes assisted his son in such tasks. Plaintiff also has made more substantial improvements to the Property: extensive repairs were done on an eroding stone wall; for over two-and-one-half months, Plaintiff undertook the large project of bringing a pond on the Property into compliance with Department of Environmental Management requirements; and he spent one summer bulldozing exposed boulders. Plaintiff credibly testified to additional work on the driveway, building foundation, lighting, landscaping, and insulation. During those years, Plaintiff knew of and considered opportunities to purchase other real estate, but chose to continue on the Property in reliance on his agreement with Defendants.

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By 2003, the agreement appeared close to an amicable conclusion. David testified that in mid-2003, Plaintiff stated that he had acquired the necessary funding and expressed his readiness and desire to proceed with closing. A figure of $300,000 was agreed to as the new sum to be paid by Plaintiff—which Gary characterizes as a modification of the previous $200,000 figure, and Defendants characterize as the first firm agreement as to price. Whether a modification or initial agreement, the testimony and other evidence in the case make clear that in August of 2003, an agreement was reached that Plaintiff would pay $300,000 and the balance of the PCU mortgage to purchase the Property from Defendants. David told Gary to have a title search performed and a Purchase and Sale Agreement ("PSA") drawn up embodying the purchase for $374,000—$300,000 plus the $74,000 balance then remaining on the PCU mortgage. David testified that he discussed this agreement with Carol, and that she agreed to it; Carol also testified to reaching this agreement with Plaintiff in 2003.

Shortly after the discussion in which David asked that a PSA be prepared, he approached Gary with the idea that Defendants retain some of the Property to provide for Defendants' grandchildren, the children of Gary's siblings. Defendants admit that, prior to August 2003, they had never discussed this additional carve-out with Plaintiff, and that Plaintiff's expectation was to receive the whole of the Property. There is also no dispute that Plaintiff was immediately hostile to the idea, saying that he would instead pack up and move away. David then relented and stated that the deal as agreed to earlier in the month would be honored. Shortly thereafter, David received the PSA from Gary and took it to be reviewed by an attorney. David's testimony is that he was advised by his attorney not to sign the PSA, which neither Defendant has done. While driving to their Florida home, Defendants left a message for Plaintiff that the deal was off.

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Defendants' trial testimony indicates that they felt the sale was unwise and inadequately provided for their grandchildren, so they "changed their mind."

Standard of Review

In a non-jury trial, the trial justice sits as the trier of fact as well as of law. Hood v. Hawkins, 478 A.2d 181, 184 (R.I. 1984). "Consequently, he weighs and considers the evidence, passes upon the credibility of the witnesses, and draws proper inferences." The factual determinations and credibility assessments of a trial justice "traditionally accords a great deal of respect . . . [because it is] the judicial officer who actually observe[s] the human drama that is part and parcel of every trial and who has had the opportunity to appraise witness demeanor and...