Court Opinion

ID: 4694686
Source: CourtListenerOpinion
Date Created: 2021-06-11 14:07:40.267045+00
Date Added: 2024-06-11T08:05:30.973416
License: Public Domain

RENDERED: JUNE 4, 2021; 10:00 A.M.
                         NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                           Court of Appeals

                              NO. 2020-CA-0361-MR

KEITH HERRON                                                          APPELLANT

                APPEAL FROM CAMPBELL CIRCUIT COURT
v.                HONORABLE DANIEL J. ZALLA, JUDGE
                        ACTION NO. 19-CI-00072

CATHERINE L. SPECHT                                                    APPELLEE

                                    OPINION
                                   AFFIRMING

                                  ** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; CALDWELL AND KRAMER,
JUDGES.

CALDWELL, JUDGE: Keith Herron appeals the judgment of the Campbell

Circuit Court denying his claim for an equitable interest in real property owned by

his former girlfriend, Catherine Specht. We affirm the trial court.

                                      FACTS

             Keith Herron (Herron) and Catherine Specht (Specht) were in a

relationship for some years and moved in together in 2009. In 2013, Specht
purchased a home in her name solely and the couple continued to reside together in

that home. The parties split household expenses; every month Herron would

deposit into Specht’s bank account an amount equal to the mortgage payment,

which represented about one-half the total monthly household expenses. From that

account, Specht would pay the household bills, including the mortgage which was

solely in her name, and the utilities and other expenses of a home.

             In the summer of 2018, Herron and Specht ended their romantic

relationship but remained roommates, still residing in the home. The parties

executed a handwritten contract wherein they agreed that Herron would continue

living at the home and would repair certain conditions in the home in anticipation

of Specht listing the home for sale. Once sold, Specht agreed all net proceeds of

the sale would be split equally between the two parties.

             The plan to continue to live together following the end of their

relationship was unsuccessful and, a short time later, Specht served Herron with

notice to quit the residence. In January of 2019, Specht obtained an Emergency

Protective Order (EPO) against Herron following an altercation which became

physical. As part of the EPO, Herron was ordered to remain away from the

residence.

             Soon after the issuance of the EPO and his expulsion from the home,

Herron filed suit seeking enforcement of the contract the two had executed. After

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a bench trial, the trial court entered a judgment in favor of Specht finding that

Herron had failed to perform per the contract in that he did not fix the conditions

enumerated in the contract so that the home could be listed for sale. Such failure

excused Specht’s duty under the contract to list the property and split any net

proceeds with Herron. Herron appealed, and we affirm the trial court.

                                STANDARD OF REVIEW

                The standard of review of a trial court’s findings of fact is “clearly

erroneous” when acting as a trier of fact and the court’s conclusions of law are

reviewed de novo.

                Because this is an appeal from a bench trial without a
                jury, the trial court’s findings of fact are “not [to] be set
                aside unless clearly erroneous with due regard being
                given to the opportunity of the trial judge to consider the
                credibility of the witnesses.” Lawson v. Loid, 896
                S.W.2d 1, 3 (Ky. 1995) (citing CR1 52.01). Factual
                findings are not considered clearly erroneous if they are
                “supported by substantial evidence.” Gosney v. Glenn,
                163 S.W.3d 894, 898 (Ky. App. 2005) (citations
                omitted). Appellate review of legal determinations and
                conclusions from a bench trial is de novo. Id. (citations
                omitted).

Goshorn v. Wilson, 372 S.W.3d 436, 439 (Ky. App. 2012).

                Our review of a circuit court’s findings of fact following
                a bench trial is to determine whether those findings are
                clearly erroneous. CR 52.01. This rule applies with
                equal force to matters involving boundary disputes.
                Croley v. Alsip, 602 S.W.2d 418, 419 (Ky. 1980).

1
    Kentucky Rules of Civil Procedure.

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             Factual findings are clearly erroneous if unsupported by
             substantial evidence. Moore v. Asente, 110 S.W.3d 336,
             354 (Ky. 2003). Substantial evidence is defined as “that
             which, when taken alone or in light of all the evidence,
             has sufficient probative value to induce conviction in the
             mind of a reasonable person.” Bowling v. Natural
             Resources and Environmental Protection Cabinet, 891
             S.W.2d 406, 409 (Ky. App. 1994) (citations omitted).

Bishop v. Brock, 610 S.W.3d 347, 350 (Ky. App. 2020).

                                    ANALYSIS

             The trial court found that the parties had entered into a valid,

enforceable contract. Commonwealth v. Morseman, 379 S.W.3d 144, 149 (Ky.

2012) (“The requirements generally associated with contracts are ‘offer and

acceptance, full and complete terms, and consideration.’”). Under the terms of the

contract executed after they had ended their relationship and dated September 8,

2018, both parties were obligated to perform certain duties. The court found that

under the terms of the agreement Herron was to pay the electric and water bills and

tender to Specht an amount equal to the monthly mortgage payment, as well as

perform repairs to a front wall and the bathroom, clean out the garage, hook up

radiant heating, and replace the cover on the electric meter box. Once those repairs

were completed, Specht agreed to list the home for sale and agreed to split the

proceeds after paying off the mortgage with Herron, as long as the parties agreed

on the sale price.

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             The court found that Herron failed to perform under the contract when

he stopped paying the electric and water bills, stopped remitting to Specht the

amount of the monthly mortgage payment and did not complete the repairs

enumerated in the contract. While the court acknowledged that the entry of the

EPO and his resultant ouster from the residence made his compliance with the

contract terms related to the repairs challenging, he sought no relief from the terms

of the EPO which would have perhaps allowed for his performance of his

contractual duties.

             When a party to a contract abandons the agreement, the other party is

released from any duty to perform.

             In Dalton [v. Mullins, 293 S.W.2d 470, 476 (Ky. 1956)],
             the court noted that when one party refused to perform
             under a written contract, the other party “had the right to
             treat this action as a breach, to abandon the contract, and
             to depart from further performance on his own part and
             finally demand damages.” That is exactly the procedure
             TMG employed. Each party to a contract is entitled to
             the benefit of his bargain. Mostert’s breach excused
             TMG’s obligation to further perform under the
             Contribution Agreement, and therefore, Mostert was not
             entitled to summary judgment granting him judgment for
             the last scheduled installment payment on the Note.

Mostert v. Mostert Grp., LLC, 606 S.W.3d 87, 94 (Ky. 2020).

             Herron was in breach of the contract when he stopped paying the bills

he was contractually obligated to pay and failed wholly to conduct any repairs,

which he contracted to undertake. Therefore, Specht was free to abandon the

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contract, including her agreement to place the home for sale and split the proceeds

with Herron. Herron did not provide consideration and so is not due the benefits

he bargained for under the contract.

             If he had failed to substantially comply with the
             provisions of his agreement, when the company was not
             in default, the breach was the plaintiff’s, and the
             defendant was justified in treating it as a discharge. Page
             on Contracts, § 1434; Johnson v. Tackitt, 173 Ky. 406,
             191 S.W. 117 [(1917)].

Blue Diamond Coal Co. v. Robertson, 235 Ky. 425, 31 S.W.2d 701, 703 (1930).

             Had Herron completed any of the work, he may well have been

entitled to compensation for the accretion in value of the property attributable to

his efforts. However, the evidence provided to the trial court indicates Herron

completed none of the items he agreed to perform per the contract. “Although the

court reversed the judgment for the plaintiff, it recognized that under a different set

of facts sufficient to show the contract had been abandoned, recovery in quantum

meruit for all of the work performed would be appropriate.” L.K. Comstock & Co.,

Inc. v. Becon Const. Co., 932 F. Supp. 906, 932 (E.D. Ky. 1993).

             Herron is under the misapprehension that he “owned” the home

because he paid bills while cohabitating in the residence for years before the

execution of the contract. However, Specht was the sole legal owner. Only her

name appears on the deed and only her name appears on the mortgage. Doubtless

there are reasons that Herron’s name appears nowhere on any legal documents

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related to the home, but such is fatal to any argument that he has an ownership

interest in the property. Rather, he attempts to rely upon the legal doctrine of

“equitable estoppel” to establish an equitable interest in the realty. One must

establish an equitable interest by establishing the following elements:

                   In Sebastian-Voor Properties, LLC v. Lexington-
             Fayette Urban County Government, 265 S.W.3d 190
             (Ky. 2008), our Supreme Court set forth the following
             elements of equitable estoppel:

                   (1) conduct which amounts to a false
                   representation or concealment of material facts, or,
                   at least, which is calculated to convey the
                   impression that the facts are otherwise than, and
                   inconsistent with, those which the party
                   subsequently attempts to assert; (2) the intention,
                   or at least the expectation, that such conduct shall
                   be acted upon by, or influence the other party or
                   other persons; and (3) knowledge, actual or
                   constructive, of the real facts. And, broadly
                   speaking, as related to the party claiming the
                   estoppel, the essential elements are (1) lack of
                   knowledge and of the means of knowledge of the
                   truth as to the facts in question; (2) reliance, in
                   good faith, upon the conduct or statements of the
                   party to be estopped; and (3) action or inaction
                   based thereon of such a character as to change the
                   position or status of the party claiming the
                   estoppel, to his injury, detriment, or prejudice.

             Id. at 194-95 (quoting Weiand v. Board of Trustees of
             Kentucky Retirement Systems, 25 S.W.3d 88, 91 (Ky.
             2000) (quoting Electric and Water Plant Bd. of City of
             Frankfort v. Suburban Acres Dev., Inc., 513 S.W.2d 489,
             491 (Ky. 1974))).

Cinque v. Lexington Vill., LLC, 609 S.W.3d 30, 38 (Ky. App. 2020).

                                         -7-
             Herron has made no attempt to establish the above; rather, seeking to

avoid the requirements of Kentucky caselaw by resorting to citing Florida caselaw.

Apparently, Florida has less-stringent requirements for establishment of equitable

interests. However, the realty concerned here is located in the Commonwealth, not

the State of Florida, so the law of Florida is wholly inapplicable. See New Domain

Oil & Gas Co. v. McKinney, 188 Ky. 183, 221 S.W. 245, 248 (1920) (“In that case

all of the authorities, so far as we are aware (and no case to the contrary has been

cited), hold that all matters concerning the title to and disposition of real estate are

to be governed by the lex loci rei sitae[.]”). We hold that Herron has wholly failed

to establish an equitable interest in the realty.

                                    CONCLUSION

             We agree with the Campbell Circuit Court that Herron abandoned the

contract when he wholly failed to perform as required in the bargained-for contract

terms. Herron has also failed to forward a cognizable claim for any equitable

interest in the property. For the foregoing reasons, we affirm the Campbell Circuit

Court.

             ALL CONCUR.

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BRIEF FOR APPELLANT:    BRIEF FOR APPELLEE:

Mark Harris Woloshin    Robert E. Bathalter
Newport, Kentucky       Alexandria, Kentucky

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