Schott v. Citizens Fidelity Bank and Trust Co., s. 84-CA-2023-M

Decision Date28 June 1985
Docket Number84-CA-2279-MR,Nos. 84-CA-2023-M,s. 84-CA-2023-M
Citation692 S.W.2d 810
PartiesJames W. SCHOTT, Appellant, v. CITIZENS FIDELITY BANK AND TRUST COMPANY, Vincent J. Drexler; P.A. Vogel Company; Commonwealth of Kentucky; Commonwealth of Kentucky, ex-rel Division of Unemployment Insurance, Cabinet for Human Resources; Cheryl L. Drexler; and Liberty National Bank and Trust Company of Louisville, Appellees. Cheryl L. DREXLER, Cross-Appellant, v. James W. SCHOTT and P.A. Vogel Company, Cross-Appellees.
CourtKentucky Court of Appeals

John M. Mayer, Jr., Hanger, Engebretson & Mayer, Clarksville, for appellant/cross-appellee.

M. Brooks Senn, Louisville, for Citizens Fidelity Bank and Trust Co.

Dana Kolter, Louisville, for Vincent Drexler.

A. Campbell Ewing, John G. Crutchfield, Ewen, MacKenzie & Peden, Louisville, for P.A. Vogel Co.

Ryan Halloran, Citizens Gen. Counsel, Frankfort, for Com., of Ky. Div. of Unemployment Ins.

David Armstrong, Atty. Gen., Frankfort, Stephen Swager, M. Dean Stewart, Louisville, for Liberty Nat. Bank.

August Klapheke, Louisville, for Drexler.

Before COMBS, MILLER and DUNN, JJ.

DUNN, Judge.

These consolidated appeals are from a judgment of the Jefferson Circuit Court distributing the proceeds from a commissioner's sale of real property in a consolidated case resulting from three separate suits concerning the real property in question.

Appellant, James W. Schott, contends that, as the owner of an undivided one-half interest in the property, he was entitled to one-half of the amount realized from the sale. Appellee/cross-appellant, Cheryl Drexler, on the other hand maintains that Schott's share of the proceeds should be reduced in proportion to improvements and repairs which she and her former spouse, Vincent Drexler, the owners of the other undivided one-half interest, had made to the property. Cheryl further contends that the trial court erred in overruling her motion to set aside its previous order distributing $8,260.10 of Vincent's share of the proceeds to appellee, P.A. Vogel Company, his judgment creditor. We affirm.

On January 22, 1971, James Schott and his wife (now deceased) and Cheryl and Vincent Drexler, then husband and wife, purchased as tenants in common the lot and house in question situated at 3306 Collins Lane in Jefferson County, Kentucky, with each couple acquiring an undivided one-half interest. To finance the purchase the Schotts and the Drexlers executed a note for $45,000.00 in favor of appellee, Citizens Fidelity Bank and Trust Company, secured by a mortgage on the real property and an adjoining tract owned solely by the Schotts. Shortly after the acquisition, the Drexlers took residence on the property. According to evidence presented by Cheryl Drexler, the two couples agreed that she and Vincent Drexler in recognition of their possessing the property began to pay two-thirds of the monthly installments on the mortgage and all premiums on homeowners insurance. In addition, Cheryl testified that with only a few exceptions, she and Vincent were wholly responsible for repairs and improvements made to the property.

During the early months of 1979, the Drexlers began to experience financial difficulties and sought Schott's consent to procure a second mortgage on the property. Schott agreed to do so, but only after the execution of a contract on February 29, 1979, which stipulated that the new second mortgage loan of $10,000.00 from Louisville Trust Bank was for the sole benefit of the Drexlers and set forth his rights against them should they ever be in default on the new indebtedness. For purposes of this appeal, the most important portion of this agreement was a clause stating that Schott had already paid one-half of the original mortgage of $45,000.00. Ultimately, however, Schott never had to enforce this contract as the Drexlers paid the new mortgage in full.

The parties continued to make payments on the original mortgage to Citizens Fidelity until April 1982. Approximately one year earlier the Drexlers divorced resulting in Vincent becoming responsible for payment of the mortgage. After April, 1982, however, he ceased making the payments and in January, 1983, Citizens Fidelity filed the senior action with which we are here concerned, a foreclosure action against Schott and the Drexlers for the unpaid first mortgage balance of $9,951.19. Vincent's numerous other creditors, including appellee, Vogel, and appellee, Liberty National Bank and Trust Company, were named as defendants. Their respective suits on promissory notes against Vincent were later consolidated with Citizen Fidelity's senior action. After consolidation the trial court eventually ordered a commissioner's sale of the real property in question. At the sale it was purchased by Schott for $51,338.31. After the payment of the amounts owed and associated charges on the note and mortgage to Citizens Fidelity, a surplus of $36,322.36 remained to be divided among the other parties.

In its individual suit against Vincent Drexler and prior to its consolidation with the other instant cases on February 25, 1983, appellee, Liberty National Bank and Trust Company, procured a prejudgment attachment against Vincent in the amount of its claim on his promissory note for $10,000.00. Appellee, Vogel, earlier on January 17, 1983, had likewise procured a prejudgment attachment against Vincent on its separate suit on Vincent's promissory note in the amount of $7,281.94. It was recorded February 3, 1983.

On July 7, 1983, an order for summary judgment was entered in the consolidated...

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