Smith v. Jaco
| Decision Date | 17 March 2015 |
| Docket Number | CIVIL ACTION NO.: 2:12-cv-00075-GHD |
| Court | U.S. District Court — Northern District of Mississippi |
| Parties | MICHAEL W. SMITH PLAINTIFF v. GAIL JACO and KIMBERLY D. CHRESTMAN also known as Kimberly D. Cherry DEFENDANTS |
This matter between pro se litigants is before the Court for a decision following a bench trial. The Court, having heard the witnesses and reviewed the evidence and arguments of the parties, hereby finds as follows.
The various state law claims asserted in this diversity action arise from the parties' complicated and volatile relationship, which culminated in a home purchase in January of 2010. The home is located at 10265 Stephenson, Desoto County, Mississippi (the "subject premises"). Plaintiff Michael W. Smith ("Plaintiff") ultimately paid the purchase price of the home, the ownership of which—as between the parties here;—is pivotal to the Court's resolution of the merits of the Plaintiff's claims.
While the sordid contested facts and an analysis of applicable law are set forth in detail below, a summary of the claims and defenses is as follows: Plaintiff alleges Defendant Kimberly D. Chrestman ("Defendant Chrestman") and her mother, Defendant Gail Jaco ("Defendant Jaco") (collectively, "Defendants") have unlawfully conspired to convert Plaintiff's lawful title by executing and recording a quitclaim deed to the subject premises from Defendant Chrestmanto Defendant Jaco (sometimes hereafter the "complained of conduct"). Plaintiff asserts this same conduct also gives rise to causes of action for fraud, trespass, breach of contract, negligence, gross negligence, and intentional infliction of emotional distress. In response, Defendants assert title to the subject premises has, at all times relevant, belonged to one or, for a brief period, the other of them. In short, they contend they may not convert or defraud another of that which was lawfully theirs when the alleged conversion occurred.
It is important to note Plaintiff does not seek to quiet title or otherwise reform the land records of Desoto County, Mississippi. As such, this Court's analysis, which follows, does not undertake to do so. The rights of third parties, such as lienholders or purchasers for value without notice of unrecorded instruments, if any, are not addressed by this decision. Should any party seek such relief, it should timely file an appropriate petition in the Desoto County Chancery Court.
Instead, this Court limits its ruling to deciding—as between the parties and for purposes of this litigation—the rightful owner of the subject premises at the time of the complained of conduct. If it is determined Plaintiff was the rightful owner at that time, then the Court will consider whether the alleged efforts of Defendants to deprive him of such ownership amount to meritorious claims of the type asserted against them. Should the Court conclude Plaintiff was not the lawful owner of the subject premises, no further analysis of Plaintiff's claims—all of which are premised on his lawful title to the subject premises at the time of the complained of conduct—will be warranted. In that instance, verdict shall be entered for Defendants.
On December 3 or 4 of 2009, while serving jail time in Tennessee, purportedly on a conviction for violence against Defendant Chrestman, with whom Plaintiff has had a lengthy abusive personal relationship, Plaintiff and Defendant Chrestman executed a "loan agreement." The agreement recited that Plaintiff would make a "loan" to Defendant Chrestman to allow her to purchase a home. The agreement also recited that Defendant Chrestman was to transfer ownership of the acquired property to Plaintiff "by quitclaim deed as collateral." The agreement lacks specification of the amount of the proposed "loan," any terms thereof, a date for performance, or even the identification of the home to be purchased and conveyed to Plaintiff by quitclaim deed.
On January 5, 2010, Defendant Chrestman's mother, Defendant Jaco, was the highest bidder at a foreclosure sale of the property located at 10265 Stephenson, Desoto County, Mississippi. She bid $49,550 and instructed the trustee to name Defendant Chrestman as grantee of the deed. The trustee delivered the deed for the property to Defendant Chrestman, and the deed was duly filed in the Desoto County land records. Consistent with a prior agreement between Defendant Jaco, Defendant Chrestman, and Plaintiff, Plaintiff then transferred a $51,491.13 check dated January 13, 2010 to Defendant Jaco. The check's memo line stated: "[P]urchase of the home at 10265 Stephenson, including repairs and remodeling." The check was paid on January 15, 2010.
Approximately two months later, on March 22, 2010, Defendant Chrestman executed and delivered a notarized quitclaim deed of the subject premises to Plaintiff, while he was stillincarcerated. Plaintiff prepared the deed himself. Plaintiff was released from jail the next month in April 2010, and according to him, he attempted one or more times between April 2010 and July 2010 to have the quitclaim deed recorded in the Desoto County land records. The Desoto County Chancery Clerk allegedly informed him the quitclaim deed was in improper form for recording.1 The quitclaim deed from Defendant Chrestman to Plaintiff remains unrecorded. According to Plaintiff, who maintains copies of the unrecorded instrument, he no longer has the original and believes it was stolen.
In July 2010, Plaintiff was again arrested and subsequently convicted for alleged acts of violence also perpetrated against Defendant Chrestman.
In August 2011, while Plaintiff remained in jail, Defendant Chrestman, who was residing at the subject premises, contends she learned the ad valorem taxes for the years 2006, 2007, and 2010 against the property were delinquent. Believing she would not qualify for a loan to satisfy the delinquent taxes and to make certain repairs she desired, Defendant Chrestman transferred the property to her mother, Defendant Jaco. Defendants made this transfer by quitclaim deed recorded in Desoto County, Mississippi, with the alleged expectation that Defendant Jaco, whose credit was apparently better than that of Defendant Chrestman, would pledge the property as collateral for a loan to satisfy the taxes and make repairs. Defendants allege Defendant Jaco ultimately did not have to pledge the quitclaimed property to obtain an additional $10,000 loan. A local bank apparently made an advance against an existing loan secured by Defendant Jacoand her husband's personal residence. Of the loan amount, Defendant Jaco and her husband allege they spent $8,373.26 on repairs and $2,213.08 on delinquent taxes for the home.
A month after Defendant Chrestman quitclaimed the deed to Defendant Jaco, Plaintiff learned of the transfer. Plaintiff contends the transfer occurred after—and in response to—a lawsuit he filed against Defendant Chrestman for unlawfully infecting him with an unwanted health condition and stealing certain personal property, including an automobile. Once Plaintiff learned of the Defendant Chrestman-to-Defendant Jaco transfer, he filed this pro se lawsuit in the United States District Court for the Western District of Tennessee. The complaint alleged the transfer to Defendant Jaco was unlawful and gave rise to a claim against both Defendants for breach of contract, fraud, conversion, intentional infliction of emotional distress, negligence and gross negligence, and trespass. Plaintiff sought damages, including but not limited to, return of the purchase price of the home, $100,000 in compensatory damages, and nullification of the transfer of the home from Defendant Chrestman to Defendant Jaco. On May 1, 2012, the case was transferred to the United States District Court for the Northern District of Mississippi.
In July 2012, while this suit was pending, Defendant Jaco transferred the property back to Defendant Chrestman by quitclaim deed, which is recorded in the Desoto County land records. Although Defendant Chrestman apparently occupied the subject premises rent-free for the duration of the time at issue, this action's complaint is premised on the transfer of the subject premises by Defendant Chrestman to Defendant Jaco. Plaintiff does not assert a claim concerning Defendant Chrestman's tenancy, if any.
Plaintiff remained incarcerated at the time of the bench trial, and accordingly, he appeared at trial by means of video conferencing. At that time, Plaintiff announced he no longer sought to have the purchase price of the home returned and, in view of the voluntary re-conveyance by quitclaim deed of the subject property by Defendant Jaco to Defendant Chrestman, he no longer sought to nullify the Defendant Chrestman-to-Defendant Jaco transfer. Instead, according to Plaintiff, the fact that Defendant Chrestman transferred the subject property to Defendant Jaco—though the property was subsequently re-conveyed by Defendant Jaco to Defendant Chrestman—nevertheless gives rise to claims against both Defendants for conversion, theft, breach of contract, intentional infliction of emotional distress, and trespass. Plaintiff seeks compensatory damages, allegedly well in excess of the diversity jurisdictional limit of this Court.
For their part, Defendants each acknowledged the subject premises was purchased at the foreclosure sale by Defendant Jaco, who instructed the trustee to convey title to Defendant Chrestman. All of the parties agree Defendant Jaco made the purchase under a verbal agreement, pursuant to which Plaintiff would reimburse Defendant Jaco for the purchase price of the property; all parties agree Plaintiff did so. It is also uncontested that Defendant Chrestman agreed to and subsequently did execute and deliver a quitclaim deed to the property to Plaintiff. Nevertheless, Defendants testified they believed that despite...
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