Webster v. Lehmer

• Decision Date: 08 April 1987
• Docket Number: No. 19339,19339
• Citation: 742 P.2d 1203
• Parties: Floyd WEBSTER, Plaintiff and Respondent, v. Mary LEHMER and Charles Lehmer, Defendants and Appellants.
• Court: Utah Supreme Court

Page 1203

742 P.2d 1203

Floyd WEBSTER, Plaintiff and Respondent, v. Mary LEHMER and Charles Lehmer, Defendants and Appellants.

No. 19339.

Supreme Court of Utah.

April 8, 1987.

Rehearing Denied Sept. 28, 1987.

Robert S. Campbell, E. Barney Gesas, Salt Lake City, for appellants.

James J. Smedley, Heber City, for respondent.

STEWART, Associate Chief Justice:

Defendant Mary Lehmer appeals the judgment of the district court rescinding a real estate contract executed by Lehmer and her husband as purchasers and plaintiff Floyd Webster as seller. ¹ The trial court entered a decree rescinding the contract based on mutual mistake, unilateral mistake, and undue influence in the abuse of a confidential relationship between the parties. We affirm the finding of undue influence and, therefore, do not reach the other issues.

I.

In 1948, Webster and his wife obtained by quitclaim deed a house situated on a parcel of property located along what was Heber Avenue and what is now Deer Valley Road in Park City, Utah. Webster lived in the house for nearly thirty-three years and paid the property taxes for nearly that long. Webster treated the parcel of property as his own, but he did not own the underlying fee interest.

Several other persons also occupied land located in the same general area on the same basis. The fee interests to most of these properties, including most of Webster's, were owned by United Park City Mining Company until 1971 when they were purchased by Royal Street Land Company (Royal Street). Some of the fee interests, including a small portion of Webster's parcel, were owned by the Bureau of Land Management (BLM).

Mary Lehmer, an attorney, acquired the right to occupy a parcel of land immediately adjacent to Webster's. The fee to this parcel was owned by Royal Street. Beginning prior to 1972, Mary Lehmer researched the issue of adverse possession to learn what she had to do to obtain clear title to the fee. Armed with this knowledge, and apparently having met the requirements for adverse possession of her parcel, Lehmer, in 1979, threatened Royal Street with a lawsuit to quiet title to the underlying fee to her parcel unless Royal Street would agree to accept $2,000 in exchange for a warranty deed conveying the fee interest to Lehmer. That price amounted to less than ten cents per square foot. Royal Street asked for $10,000 but ultimately accepted Lehmer's offer and transferred clear title to the property for $2,000.

Lehmer testified that she attempted to educate her neighbors concerning their legal rights to the underlying fee interests and that she encouraged them to join together to fight Royal Street. Her neighbors looked to her as an authority on the subject because she was an attorney and had done research on the subject. One neighbor, Neil Clegg, specifically remembered a spontaneous meeting of neighbors at Lehmer's house where Lehmer explained, at the neighbors' request, their rights to the properties. Clegg testified that Webster attended part of that meeting.

During the late 1970s and early 1980s, Royal Street had an unwritten policy of selling to the occupants of the land the fee interests underlying their properties for fifty cents per square foot, apparently because of the potential rights the occupants had as adverse possessors. Several of the occupants took advantage of this policy, purchased the underlying fee interests, and later sold their properties for substantial profits made possible by sharply escalated land values resulting from the development of the Deer Valley ski resort in the area. The evidence at trial showed that the fee interests to some of these lots that were comparable in size to Webster's sold for between $240,000 and $410,000.

Lehmer was aware of the Royal Street policy to sell for fifty cents per square foot. Webster was aware of the Royal Street policy, but he thought his property was owned by the BLM. He thought so because he knew that some of his neighbors occupied BLM land. Webster did nothing to determine conclusively the correct ownership of the underlying fee. Lehmer, however, knew that Webster's lot was owned by Royal Street.

During the years the Websters and the Lehmers were neighbors, they exchanged friendly service for advice. Webster helped the Lehmers with household repairs, for which he was sometimes paid. Lehmer, at times, offered legal advice and assistance. For example, prior to Mrs. Webster's death in 1975, Lehmer helped Mrs. Webster prepare an answer to a complaint that had been filed against Mrs. Webster. Later, a few years after Mrs. Webster died, Floyd Webster asked Lehmer for legal advice concerning his property. Lehmer reviewed Webster's documents of title to determine how long he had been on the property for adverse possession purposes and what kind of claim Webster had to the property.

In October of 1980, Webster was unemployed, the water and gas to his house had been cut off, and the property taxes had been in arrears for almost four years. Webster also had a drinking problem, and his driver's license had been revoked because of an arrest on a drunken driving charge. The trial court found that because of these factors and others, Webster had a depressed and despondent state of mind.

While Webster was walking along the road in front of Lehmer's house on October 7, 1980, Lehmer asked Webster in. She and her husband offered to purchase Webster's interest in the property for $5,000 and to let Webster retain a life estate in the house so that he would have a place to live. Webster accepted the offer, and Lehmer immediately drafted a hand-written contract. Webster and Mr. and Mrs. Lehmer signed the contract. The $5,000 purchase price was to be paid in full when Webster tendered to the Lehmers a quitclaim deed. The contract further provided that Lehmer would pay for a survey to obtain a legal description of the property and that Webster would pay the property taxes as long as he occupied the property.

Because of Webster's financial problems, he sought advancements of the purchase price from the Lehmers. The Lehmers willingly advanced $900 in several payments to Webster. On December 21, 1980, Webster visited Lehmer to obtain one of these advances. At that time, Webster planned to get married and move to Heber City. Lehmer suggested that under those circumstances, Webster would no longer need his life estate in the house. He agreed, and Lehmer immediately prepared a hand-written agreement terminating Webster's life estate. This agreement was drafted on the reverse side of the same piece of paper containing the original October 7, 1980, agreement. In return for Webster's relinquishment of his life estate, the Lehmers agreed to pay the unpaid water, sewer, and scavenger charges of $356.20, the 1980 property taxes on Webster's house, and the legal expenses and recording fees necessary to terminate Mrs. Webster's joint tenancy interest in the home. Lehmer also prepared and typed an "Affidavit to Terminate Joint Tenancy." This was signed by Webster and by Lehmer as notary public. The affidavit was intended to document the fact that since Webster had survived his wife, her interest in the house had devolved upon him. A $25 attorney fee for drafting the affidavit was listed in Lehmer's records concerning Webster's property and was among the total fees the trial court found Lehmer had paid in consideration for the termination of Webster's life estate.

It was later determined that the purchase contract was not effective in transferring all Webster's interest in the property to the Lehmers. Lehmer mistakenly read the deed which granted the interest to Webster and his wife as creating a joint tenancy, when in fact it created a tenancy in common. Thus, when Mrs. Webster died intestate in 1975, her interest, instead of passing solely to Mr. Webster, passed by the rules of intestate succession to Webster and Webster's two daughters. Obviously he could not transfer his daughters' interests.

II.

Before we address the confidential relationship issue, we must dispose of another argument advanced by Lehmer. She argues that the trial court prejudicially erred when it admitted evidence concerning the market value of the undivided fee interest when Webster owned the rights of an adverse possessor and not the undivided fee. Lehmer produced evidence that Webster's interest was worth at most what Lehmer paid Webster for it.

Given the totality of the circumstances, however, it was proper for the trial court to consider the value of the undivided fee. Lehmer admitted that she acquired absolute title to her property by threatening Royal Street with an adverse possession lawsuit. She also testified that she advised other similarly situated occupants of the land in the area concerning their adverse possession claims. She specifically recalled a time after Mrs. Webster died when she looked at Webster's quitclaim deed to see if he had been on the property long enough to advance an adverse possession claim. Webster had lived on the parcel for thirty-three years when he sold his rights to the Lehmers and he had paid the taxes. Therefore, there is a real possibility that, like Lehmer, Webster also had claim to the underlying fee by adverse possession. See U.C.A., 1953, §§ 78-12-7 to -15. It is also clear that Lehmer was aware of the potential of Webster's claim. Of course, we express no opinion on what the outcome of an adverse possession claim by Webster would be, but it is clear that Webster's property interest was...