Makozy v. Makozy
| Decision Date | 22 March 2005 |
| Citation | 874 A.2d 1160 |
| Parties | Gregory M. MAKOZY, and His Wife, Maria Makozy, Appellants v. Frank MAKOZY, and His Wife, Angela Makozy. |
| Court | Pennsylvania Supreme Court |
Thomas J. May, Butler, for appellants.
Bruno A. Muscatello, Butler, for appellees.
Before: FORD ELLIOTT, LALLY-GREEN, and TODD, JJ.
OPINION BY FORD ELLIOTT, J.:
¶ 1 This is an appeal from a judgment entered in favor of Frank Makozy ("father") and Angela Makozy ("mother") (collectively "parents") and against Gregory Makozy ("son") and Maria Makozy ("daughter-in-law") (collectively "children") following a two-day non-jury trial. Children filed a claim sounding in equity, alleging the existence of a constructive trust regarding legal title to children's real property, which title children had conveyed to parents; and damages resulting from children's inability to refinance the mortgage on the property at a lower interest rate as a result of parents' refusal to reconvey the legal title to children. Parents filed a counterclaim, claiming breach of four oral contracts wherein parents loaned children certain agreed upon sums of money, which children had not fully repaid and on which parents asserted damages in the form of the unpaid balance plus interest and other costs. For the reasons that follow, we affirm in part and reverse in part.
¶ 2 Certain facts, which we set forth here, are not in dispute. On or about March 22, 1994, children purchased a home at 115 Sturbridge Drive, Evans City, Pa. for $256,000. According to son's testimony, children used $64,000 from the sale of their Norristown, Pa. townhouse as a down payment on the house. (Notes of testimony, 7/12/02 at 20.) By deed dated April 30, 1994 and recorded May 31, 1994, children conveyed a one-half interest in their home to parents in consideration of $1.00. Children conveyed the other one-half interest in their home by deed dated September 18, 1996 but not recorded until February 6, 1998, also in consideration of $1.00. During this same time period, parents loaned son the following sums of money:
Loan 1:
January 6, 1994
Amount of loan — $30,000
Interest: 10%
Interest paid: $3,000.00
¶ 3 Among the issues regarding this loan was whether the interest was for one year only or per annum until the balance of the loan was repaid. The parties agreed son had repaid a portion of the loan, but disagreed as to the amount he still owed. Also at issue was the purpose of and due date for the loan.
Loan 2:
February 15, 1995
Amount of loan — $7,500
Due date: February 15, 1995
¶ 4 Among the issues regarding this loan was whether the parties agreed children would pay interest on the loan, which was used to obtain a bail bond in connection with numerous criminal charges pending against son in Allegheny County in connection with his business. When the bail bond was released following son's trial, in November of 1995, son requested that father release the money to son's attorney to be used to file an appeal, and father acquiesced.
Loan 3:
November 30, 1995
Amount of loan: $78,300 out of $100,000
required for straight cash appeal bond
¶ 5 At issue was the amount father was entitled to be reimbursed for the loan; whether the parties agreed son would pay interest on the loan; and whether son agreed to pay any and all costs parents incurred to assemble the funds for the loan, which was used for a straight cash appeal bond so that son could continue working in Norristown during the pendency of his appeal.
Loan 4:
November 5, 1998
Amount of loan: $25,000
Interest: 6%
Amount paid: $5,000
¶ 6 This loan was used to pay part of the $88,000 in restitution the court ordered son to pay to the victims following his conviction for theft by failure to make required disposition in Allegheny County. At issue was whether the interest increased to 7.2% after the first six months and whether the interest was compounded monthly.1
¶ 7 In May of 1999, son was attempting to refinance the Sturbridge Drive house at a lower interest rate and asked parents to reconvey the legal title to the house to children. Father refused to comply until son repaid the balance due on the loans. The parties disputed this balance: father claimed son owed him approximately $50,000, while son offered to re-pay parents $25,000. Following failed and angry attempts to reach an agreement, children filed the aforementioned complaint in equity on September 20, 1999.2 In their amended complaint, children asked the court to establish a constructive trust in the house for the benefit of children and also asked the court to award children $210,780 in extra interest they would be forced to pay because they could not refinance the house at a lower interest rate and over a shorter term. (Amended complaint in equity, 1/14/00, R. at 7.)
¶ 8 In response, parents filed a counterclaim on October 13, 1999 for breach of four contracts, claiming damages in the amounts of $18,180 through August 6, 1999 on Loan 1, plus accruing interest at 10% compounded annually on the unpaid balance; $10,612 through August 15, 1999 on Loan 2, plus accruing interest at 8% compounded annually on the unpaid balance; $75 on Loan 3 through August 1, 1999, plus accruing interest at 9% compounded annually on the unpaid balance; and $21,218 through August 4, 1999 on Loan 4, plus accruing interest at 7.2% compounded monthly on the unpaid balance. Each count also asked the court to award "costs and such other and further relief as the Court may deem just." (Answer, New Matter and Counterclaims, 10/13/99, R. at 2.)
¶ 9 On July 12, 2002 and July 18, 2002, the court, sitting in equity, tried the case non-jury. Both parties vigorously argued their version of the events leading up to the loans, all of which were based upon oral agreements; the terms and conditions of loans, including interest rates, if any; son's other alleged promises to reimburse parents for the costs they incurred in procuring the loans; and the reasons and terms under which children transferred legal title in the Sturbridge Drive house to parents. At the conclusion of testimony, both attorneys presented argument to the court, which then asked the parties to submit proposed findings of fact and conclusions of law.
¶ 10 On August 16, 2002, the court filed its memorandum opinion and non-jury decision, containing findings of fact and conclusions of law. The court found parents' version of the facts more credible than son's.3 (Trial court opinion, 8/16/02 at 1-3 R. at 24.) In its legal analysis, the court found insufficient evidence to support a constructive trust because it found no confidential relationship between parents and children so as to defeat the Statute of Frauds, which bars the enforcement of all oral agreements modifying a deed or land transfer. (Id. at 3-5.) The court further found that the Statute of Limitations did not bar parents' claims for breach of contract, either based upon the acknowledgement doctrine or because the dates of the loans fell within the four-year statute. (Id. at 5-7.) The court therefore ordered that judgment be entered in favor of parents in the amount of $63,523.67, the amount of the unpaid balance on the loans, plus the agreed upon interest, plus $19,798,00 in dividend losses, plus 6% simple interest from January 1996 until July 2002. (Id. at 8.) This order was entered August 19, 2002.
¶ 11 Children filed a timely motion for post-trial relief, claiming the court's factual findings were based on insufficient evidence, against the weight of the evidence, and/or contrary to law. By memorandum opinion and order docketed March 10, 2003, the court denied children's post-trial motions. (Memorandum opinion and order, 3/10/03, R. at 30.) Children filed an emergency motion to modify the non-jury decision on March 19, 2003, apparently unaware the court had already denied their post-trial motions. (Emergency motion to Modify Non-Jury Decision, 3/19/03 at 2 ¶ 3, R. at 31.) The court denied the motion the same day, and parents praeciped for entry of judgment in the amount of $97,208.78 plus interest from March 12, 2002 and costs, on April 7, 2003. (R. at 32.) Children filed their appeal on May 2, 2003, in which they raise the following issues:4
I. Whether the verdict of the trial court should be reversed since it was not supported by substantial evidence of record.
II. Whether the Court erred in failing to find that any of [parents'] claims were barred by the Statute of Limitations.
III. Whether the Court erred in failing to award [children] damages.
Appellants' application for reargument/reconsideration at Exhibit G. In their prayer for relief, children ask us either to enter judgment in their favor or to grant a new trial as to all issues. We will address appellants' issues together insofar as we find them intermingled.
¶ 12 Shamnoski v. PG Energy, Div. Of Southern Union Co., 579 Pa. 652, 659, 858 A.2d 589, 593 (2004). "Our scope of review with respect to whether judgment n.o.v. is appropriate is plenary, as with any review of questions of law." Id., citing Phillips v. A-Best Products Co., 542 Pa. 124, 130, 665 A.2d 1167, 1170 (1995).
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