Lewis v. Manning
| Decision Date | 20 April 2012 |
| Docket Number | NO. 2010-CA-002162-MR,2010-CA-002162-MR |
| Parties | ROBERT KNOX LEWIS APPELLANT v. DEBORAH L. MANNING; TERRY LITTLETON; AND WILMA LITTLETON APPELLEES |
| Court | Kentucky Court of Appeals |
TO BE PUBLISHED
APPEAL FROM MAGOFFIN CIRCUIT COURT
Appellees jointly owned certain real estate on Road Branch of Rock House Fork in Magoffin County, Kentucky. The deed description for the property indicated that it was "supposed to be three hundred (300) acres, more or less[,]" in size. On May 24, 2007, Appellees entered into a purchase contract to sell the property to Appellant for $159,900.00.2
As part of that contract, Appellant signed two documents of note. The first was entitled "Listing Broker's Disclosure to Potential Buyers" and provided as follows:
The second document was entitled "Survey Waiver Form" and contained the following language:
I/We the Seller(s) or Buyer(s), Bob Lewis, hereby acknowledge(s) that we/he/she has/have been advised by our/his/her real estate agent, Roger K. Mayse, of real estate company, Manning Realty [ ], to obtain a property survey of the property of which I/We are either selling or buying. The Seller(s)/Buyer(s) hereby waive(s) our/his/her right to a property survey against the advice of his/her real estate agent or broker and agree(s) to hold harmless the real estate agents or brokers involved in this transaction for amount of acreage, boundary lines, or anything that could have been uncovered or clarified by a survey of the property.
Appellant signed both documents and, thereby, acknowledged that the total amount of acreage in the property was not guaranteed or warranted and that the property was instead being sold by the boundary description. The closing of the property was scheduled for October 15, 2007, at the office of attorney Jeffrey Scott.3
On the morning of the scheduled closing, Appellant spent approximately two hours looking at the property with a surveyor. The surveyor told him that the front boundary of the property was approximately 1,000 feet shorter than expected and that this resulted in a significant discrepancy in the acreage. When Appellant arrived at the closing, he told Appellees that he was not going to close because he was concerned that the property did not contain 300 acres. Instead, he offered to pay for a survey and $300.00 an acre for the land that was actually there, but this offer was declined. Appellant was instead advised that the property was being sold by the boundary - not by the acreage - and was toldthat he need not close on the purchase of the property that day. Nonetheless, Appellant called and consulted with his attorney and decided to close that day pursuant to the terms originally agreed to by the parties.
On September 16, 2008, Appellant filed an action against Appellees in which he sought to void or reform the deed of conveyance and to obtain at least a partial refund because the subject property did not contain 300 acres. Appellant alleged that prior to the sale he had asked Appellees about the actual size of the property and was told that "the tract of land consisted of 300 acres of land as stated in the description of the property." Appellant further alleged that after he took possession of the property he discovered that it consisted of fewer than 45 acres - a deficiency of approximately 85%.4 Appellant attributed this discrepancy to fraud on the part of Appellees or mutual mistake by the parties and sought relief on those grounds.
Following discovery, a bench trial was held on October 4, 2010. Appellant testified that based on his dealings with Appellees prior to the closing, he believed that he was buying 300 acres. However, Appellant offered contradictory testimony as to the question of whether Appellees had actually represented to him that the property contained 300 acres, at first testifying that he was not sure if Appellee Manning had told him this but later testifying that she had. He subsequently acknowledged that on the day of the closing he did notknow how many acres there were in light of his conversation with the surveyor that morning.
Appellant also testified that he had talked to Merle Williams, a neighboring landowner, on the day of the closing and was informed that Williams owned 40 acres of the subject property and that a realty company owned an additional portion. Because of this, Appellant testified, the actual acreage of the property was "up in the air" and he did not want to close on the purchase. Despite this fact, Appellant ultimately decided to close because he wanted the land for hunting. Nonetheless, Appellant testified that had he known he was getting less than 45 acres he would not have done so.
Appellee Manning testified that on the day of the closing, Appellant told Appellees that he did not want to close because "he didn't believe the acreage was there." According to Manning, she told Appellant that the property was being sold by the boundary and that she had never guaranteed that it contained 300 acres because she had never had the property surveyed and had no way of knowing the actual acreage. She further indicated that when selling non-surveyed property, she never warranted acreage. Manning testified that when Appellant announced that he was not going to close, he was informed that he would not be compelled to buy the property if he did not want to.
However, Appellee Manning also acknowledged that Appellees had previously signed an oil and gas lease stating that the property contained 300 acres, but she noted that they did not prepare the lease and did not actually know howmany acres were contained in the tract. Appellees, the Littletons interacted with Appellant only on the day of the closing and testified that they had never told him that the property contained 300 acres. They also testified that they had never walked the boundary of the property and did not know the actual acreage.
Rhonda Damron, Jeffrey Scott's paralegal, testified that she was in a conference room with the parties during the closing and had witnessed all conversations between them. Damron handled much of the work for the closing, including the title work. According to Damron, when Appellant arrived for the closing he stated that he was not going to close because he was concerned that the property did not contain 300 acres. Damron testified that no one in the conference room told Appellant that the property was 300 acres in size. Instead, Appellant was plainly advised that the property was being sold by the boundary and not by the acreage. Damron also testified that Appellant had previously been given a PVA assessment showing that the property consisted of only 128 acres, a fact which Appellant acknowledged.5 She also told Appellant that he need not close that day, but she noted that Appellant insisted on closing.
On November 1, 2010, the trial court entered judgment in favor of Appellees. Based on the evidence discussed above, the court found that Appellant "was aware at the time of the closing that the property did not contain 300 acres" and that "he purchased the land by the boundary as it was shown to him." Because of this, the court concluded that no fraud had occurred that would merit voiding thedeed. The court also found that a reformation of the deed was not merited under the so-called "ten-percent rule"6 due to the deficiency in the actual acreage because Appellant "was well aware of the fact that the property did not contain 300 acres and chose to close the real estate transaction anyway." This appeal followed.
This case was tried by the trial court sitting without a jury and, therefore, our standard of review is governed by Kentucky Rules of Civil Procedure ("CR") 52.01, which provides that, "[i]n all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specifically and state separately its conclusions of law thereon and render an appropriate judgment[.]" See also Gosney v. Glenn, 163 S.W.3d 894, 898 (Ky. App. 2005). On appellate review, "[f]indings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." CR 52.01. A finding of fact is not clearly erroneous if it is supported by substantial evidence. Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998); Gosney, 163 S.W.3d at 898. "Substantial evidence is evidence, when taken alone or in light of all the evidence, which has sufficient probative value to induce conviction in the mind of a reasonable person." Hunter v. Hunter, 127 S.W.3d 656, 659 (Ky. App. 2003). ...
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