Court Opinion

ID: 2805591
Source: CourtListenerOpinion
Date Created: 2015-06-04 14:15:57.093736+00
Date Added: 2024-06-11T12:10:55.211848
License: Public Domain

Present: Lemons, C.J., Goodwyn, Millette, Mims, Powell, and
Kelsey, JJ., and Koontz, S.J.

WILLIAM D. EVANS, IN HIS CAPACITY
AS TRUSTEE OF THE WANDA S. EVANS TRUST
                                        OPINION BY
v.   Record No. 141277   SENIOR JUSTICE LAWRENCE L. KOONTZ, JR.
                                       June 4, 2015
WAYNE L. EVANS, INDIVIDUALLY AND
AS THE PERSONAL REPRESENTATIVE OF
DOUGLAS E. EVANS, DECEASED, ET AL.

            FROM THE CIRCUIT COURT OF TAZEWELL COUNTY
                     Keary R. Williams, Judge

      In this appeal, we consider as an issue of first

impression in Virginia whether one spouse with an ownership as

a tenant by the entirety in real property may, by his or her

sole act, convey that ownership to the other spouse to create

a fee simple estate in the grantee spouse.

                           BACKGROUND

      On November 26, 1973, Douglas E. Evans and Wanda S.

Evans, husband and wife, obtained title to a parcel of real

property known as 605 Fairway Drive in the Town of Bluefield

in Tazewell County (the "Fairway Drive property") as tenants

by the entirety with right of survivorship by way of a deed

from Ply Developing Corporation.   On December 27, 1976,

Douglas executed a general warranty deed (the "1976 deed")

that purported to convey to Wanda "all of his interest" in the

Fairway Drive property in exchange for both "love and

affection" and "ten dollars, cash-in-hand paid."   The 1976
deed identified Douglas as the sole grantor, naming Wanda only

as the grantee.

     For reasons not explained in the record, the 1976 deed

was not recorded in the land records of Tazewell County in

Deed Book 456, page 322 until April 11, 1979.   Nor does the

record provide direct evidence that prior to it being

recorded, Wanda accepted physical delivery of the 1976 deed or

that it was she who caused the deed to be recorded.

     Douglas and Wanda had three sons, William D. Evans, Lloyd

David Evans and Wayne Lewis Evans.   Wayne has two children,

Lisa Marie Evans and Jason Lloyd Evans.   On February 2, 1993,

Wanda executed a trust agreement creating a revocable inter

vivos trust designated as the Wanda S. Evans Trust (the

"trust").

     Under the pertinent terms of the trust, upon Wanda's

death the assets were to be distributed as follows:

       •    $25,000 each individually to her grandchildren Lisa
            and Jason, to be held in separate trusts by William
            until each grandchild reached the age of 30;

       •    A life estate to Douglas in the Fairway Drive
            property including household goods, if he survived
            Wanda at her death;

       •    The remainder of the trust assets, including the
            Fairway Drive property and the household goods, to
            William.

In the trust Wanda expressly made no provision for Wayne and

Lloyd to receive any assets of the trust.   The trust further

                                 2
provided that William was to serve as an alternate successor

trustee.    At all times relevant to the litigation in this

appeal, William served in that capacity after Wanda's death

and the death of the first named successor trustee.

     Contemporaneous with the creation of the trust, Wanda

executed a deed which purported to convey by general warranty

"all of her interest in" the Fairway Drive property to herself

as trustee of the trust (the "1993 deed").    The 1993 deed

identifies the property as "being the same interest in real

estate conveyed to [Wanda] by deed dated February 2, 1993

[sic], from Douglas E. Evans, which deed is of record in . . .

Deed Book 456, page 322." 1

     Wanda died testate on April 18, 1994.    At the time of her

death, she and Douglas were residing in the Fairway Drive

property.   Under the terms of her will, which was executed the

same day as the 1993 deed and the trust, any property

remaining in her estate was to pour over into the trust.

Consistent with the provisions of the trust, her will also

purports to bequeath the Fairway Drive property to William

subject to a life estate in Douglas.

     1
       Although the 1993 deed misstates the record date of the
1976 deed, it correctly identifies that deed by its location
in the land records. Because the 1993 deed was not challenged
on this discrepancy, we will treat it as a scrivener's error.

                                 3
        Following Wanda's death, title to the Fairway Drive

property became a subject of dispute principally between Wayne

and William.    On April 17, 1995, Wayne, as next friend of Lisa

and Jason, filed a declaratory judgment action in the Circuit

Court of Tazewell County against Douglas, William and the

executor of Wanda's estate.     Therein, Wayne asserted that the

trust failed on numerous grounds.     As pertinent to this

appeal, Wayne asserted that the 1993 deed was ineffective to

transfer any interest in the Fairway Drive property to the

trust because "neither spouse can sever an estate by the

entireties or convey or dispose of any part of it . . . by his

or her sole act."    Implicit in this assertion was the further

assertion that the 1976 deed was ineffective to convey

Douglas' interest in the Fairway Drive property to Wanda by

his sole act.    Thus, Wayne contended that Wanda "had no

separate estate or interest in" the Fairway Drive property

which she could convey by deed to the trust or devise in her

will.

        On November 13, 1995, the circuit court ruled that "no

actual controversy" existed between the parties and dismissed

the complaint without prejudice.      Thereafter, on November 30,

1995, Wayne, both as next friend of his children and

individually, William, Douglas, and Wanda's executor entered

into a mutual release and settlement agreement.     As relevant

                                  4
to this appeal, the parties to the settlement agreed that

Douglas would be permitted to remain in the Fairway Drive

property until his death and further was to receive a payment

of $81,869.63 from Wanda's estate in "full satisfaction of his

claims against the estate, whether under the Trust, the Will,

his elective share or otherwise."   Douglas expressly "waive[d]

any right he may have to [the Fairway Drive property] except

for his life interest."   Douglas continued to live in the

Fairway Drive property until his death on March 12, 2012.

     On November 19, 2012, William, in his capacity as trustee

of the trust, filed a declaratory judgment action against

Wayne, both individually and as personal representative of

Douglas' estate, Lloyd, Lisa and Jason in the circuit court

seeking to quiet title in the Fairway Drive property.   An

amended complaint was filed on February 22, 2013.   As alleged

therein, Wayne and Lloyd asserted a claim of ownership in the

Fairway Drive property through Douglas' estate, contending

that title to the property had remained in Douglas and Wanda

as tenants by the entirety at the time of Wanda's death and,

thus, that it became Douglas' property in fee simple as the

survivor.

     Wayne and the other defendants (collectively, "Wayne")

filed an answer in which they acknowledged the claim that the

Fairway Drive property had remained as an estate by the

                                5
entirety in Douglas and Wanda.   This was so, they contended,

because the 1976 deed was ineffective to divest Douglas of his

interest since it was not executed both by Douglas and Wanda

as grantors.

     William and Wayne filed cross-motions for summary

judgment, the respective positions of which parallel the

arguments made in this appeal.   In summary, William maintained

that the 1976 deed was effective because Douglas and Wanda

"joined" in the deed as grantor and grantee.   He further

maintained that even if the 1976 deed was technically

deficient, the equitable doctrine of estoppel by deed should

prevent Douglas' estate from seeking an interest in the

property.   Finally he contended that the settlement agreement

barred Douglas' estate from asserting that Douglas had any

interest other than a life estate in the Fairway Drive

property.

     In response, Wayne maintained that the 1976 deed was

ineffective because tenants by the entirety must join as

grantors to convey any interest in the property, even if the

conveyance is to one of them individually.   He further

maintained estoppel by deed was inapplicable where the deed

relied upon was void, and not merely technically deficient.

Finally, Wayne denied that the settlement agreement was

applicable to the Fairway Drive property because neither the

                                 6
trust nor Wanda's estate ever had ownership of the property

and, thus, the trust could not assert a claim of ownership

based on Douglas' waiver of any interest he might have had in

the property.

        Following argument on the cross-motions, the circuit

court issued an opinion letter dated October 10, 2013 in which

it concluded that the 1976 deed failed to show the requisite

intent to "jointly transfer[]" the Fairway Drive property to

Wanda in fee simple and thus, because that deed was

ineffective, the 1993 deed was likewise ineffective to

transfer any interest to the trust.    The circuit court

concluded that William could not rely upon the equitable

doctrine of estoppel by deed "due to the invalidity of the

1976 conveyance."    The court entered an order dated December

17, 2013 sustaining Wayne's motion for summary judgment, but

retaining jurisdiction over the case to consider a motion for

reconsideration which had been filed by William on December 5,

2013.

        In the motion for reconsideration, William, among other

things, asked the circuit court to make an express ruling as

to the effect of the November 30, 1995 settlement agreement.

William asserted that the settlement agreement constituted a

waiver of any claim that Douglas, and by extension his estate,

                                  7
had on the Fairway Drive property, thus effectively validating

the 1976 deed.

     In a hearing on the motion for reconsideration, the

circuit court acknowledged that it had not expressly addressed

the effect of the settlement agreement, but that "it was

implicitly addressed."    Accordingly, the court ruled that its

judgment did not violate the terms of the agreement.   By a

final order dated May 27, 2014, the court denied the motion

for reconsideration and entered final judgment for Wayne.     We

awarded William this appeal.

                            DISCUSSION

     William assigns error to the circuit court's rulings that

the 1976 deed was ineffective and, therefore, failed to

terminate Douglas' and Wanda's tenancy by the entirety in the

Fairway Drive property.   He further assigns error to the

court's correlative rulings that neither estoppel by deed nor

the terms of the settlement agreement barred Douglas' estate

from asserting ownership of the Fairway Drive property.

     We review questions regarding the validity and effect of

deeds and other written legal documents de novo.   See Ott v.

L&J Holdings, LLC, 275 Va. 182, 187, 654 S.E.2d 902, 904

(2008).   Because the dispositive issue in this case, as

recognized by the circuit court and the parties, is whether

the 1976 deed effectively terminated Douglas' tenancy by the

                                 8
entirety ownership in the Fairway Drive property, leaving

Wanda as the sole owner in fee simple, we begin our analysis

with a review of our prior decisions regarding ownership of

real property as tenants by the entirety.

        Virginia is one of about two-dozen states that continue

to recognize tenancies by the entirety.    See Bunker v. Peyton,

312 F.3d 145, 151 (4th Cir. 2002).    Tenancy by the entirety is

a legal fiction "'based upon the same four unities that

support joint tenancies [plus] a fifth unity . . . of

marriage.'"     Rogers v. Rogers, 257 Va. 323, 326, 512 S.E.2d
821, 822 (1999)(quoting Jones v. Conwell, 227 Va. 176, 181,

314 S.E.2d 61, 64 (1984)); see also Pitts v. United States,

242 Va. 254, 258-59, 408 S.E.2d 901, 903 (1991).

        It is well established that specific consequences flow

from the addition of this fifth unity.    First, during the

marriage, neither spouse may make an absolute disposition of

property held as tenants by the entirety "by his or her sole

act."    Hausman v. Hausman, 233 Va. 1, 3, 353 S.E.2d 710, 711

(1987).    Second, consistent with this restriction on

alienability, no creditor of only one spouse can attach

property held by both spouses as tenants by the entirety.

Pitts, 242 Va. at 258-59, 408 S.E.2d at 903.    Finally, so long

as the property remains held by them as tenants by the

entirety, upon the death of one spouse, ownership of the

                                  9
property will pass to the other in fee simple outside the

estate of the deceased spouse.    Vasilion v. Vasilion, 192 Va.
735, 740, 66 S.E.2d 599, 602 (1951).

     While these principles have been applied in many cases

extending to the earliest decisions of this Court, see, e.g.,

Thornton v. Thornton, 24 Va. (3 Rand.) 179 (1825), a careful

review of these cases reveals that, unlike the current case,

they primarily involved either a security interest of or a

conveyance to a third party.     See, e.g., Hausman, 233 Va. at

3, 353 S.E.2d at 711 (1987)(refusing to prioritize lien on

marital property granted by only one spouse); Waskey v.

Thomas, 218 Va. 109, 113, 235 S.E.2d 346, 349 (1977)(granting

rescission where grantee obtained deed signed by only one

spouse).   Thus, the question whether a deed executed by one

spouse purporting to convey his or her ownership in a property

held by the entirety to the other spouse is one of first

impression in Virginia.

     Wayne contends that the circuit court correctly ruled

that any conveyance of ownership in property held by the

entirety must be joined by both spouses as grantors.    In

support of this contention, he relies heavily on our decision

in Vasilion.

     In Vasilion, we considered whether a judgment creditor of

the husband was entitled to rescission of a deed in which the

                                 10
husband and wife jointly conveyed a property held by them as

tenants by the entirety to the wife solely on the ground that

the purpose of the deed was to put the property beyond the

reach of the creditor. 192 Va. at 738, 66 S.E.2d at 601.

Concluding that the trial court did not err in refusing to

rescind the deed, we based our decision on the fact that the

property could not have been attached by the creditor prior to

the conveyance, because the debt was not a "joint debt[] of

both spouses."   Id. at 740, 66 S.E.2d at 602.    In so doing, we

noted that "husband and wife unquestionably can join in a deed

conveying the entirety to a third party, and in

Virginia[, Code § 55-9] permits a husband and wife to join in

a deed conveying land to himself or herself."     Id.

Emphasizing the latter part of this statement, Wayne contends

that property held by spouses as tenants by the entirety may

only be conveyed to one of them when both join in the deed as

grantors.   We disagree.

     First, we note that in Vasilion the validity of the deed

to the wife would not have altered our holding that the

judgment creditor could not have attached the property prior

to the conveyance.   Thus, while we held that the deed to the

wife was effective because both spouses joined as grantors in

the deed, this does not resolve the question whether both

                                 11
spouses must join as grantors in a deed purporting to convey

property held as tenants by the entirety solely to one spouse.

     This case presents the first opportunity for the Court to

resolve the issue whether under any circumstance one spouse

(the "grantor-spouse") may effectively convey all of his or

her ownership in property held in a tenancy by the entirety to

the other spouse (the "grantee-spouse") who does not join in

the deed as grantor.   While the best practice would still be

for both spouses to join as grantors in a deed to one of them

separately, for the reasons that follow we hold that where

there is sufficient evidence of the intent of the grantor-

spouse to make such a conveyance and, likewise, of voluntary

acceptance of the conveyance by the grantee-spouse, the

requirement of mutual consent in the conveyance is met.

     In discussing the requisites for a valid deed, voluntary

acceptance by the grantee is often discounted as a formality

that is subsumed within the prerequisite delivery of the deed

to the grantee.   As we observed long ago in Skipwith v.

Cunningham, 35 Va. (8 Leigh) 271, 282 (1837), "the assent of

the grantee is implied in all conveyances; first, because of

the supposed benefit; secondly, because it is incongruous and

absurd that when a conveyance is completely executed on the

grantor's part, the estate should continue in him; thirdly, to

prevent the uncertainty of the freehold."   Nonetheless, the

                               12
role of the grantee to a conveyance is not a passive one.

"Delivery indeed to the grantee himself implies acceptance by

him; but as such delivery is not always to him in person, the

necessity of immediate acceptance is not implied in the

necessity of a delivery."   Id. at 281.

       "That act [of delivery of the deed] indeed cannot compel

the grantee to take against his will, but it is, as to the

grantor, a complete and consummate act before that will is

declared, although it may be avoided by the dissent of the

grantee.   No [person] indeed can be forced to take an estate

against his will; but the law on the other hand presumes that

every estate, given by will or otherwise, is beneficial to the

party to whom it is given, until he renounces it."    Id. at

281.   The rule laid down in Skipwith nearly two centuries ago

remains the law of the Commonwealth today.    See, e.g., Langman

v. Alumni Ass'n of the Univ. of Va., 247 Va. 491, 500, 442
S.E.2d 669, 675 (1994)("Acceptance on the part of the grantee

is implied, because the conveyance is presumed to be

beneficial, unless the grantee refuses to accept the deed by

some act of renunciation, dissent, disagreement, or

disclaimer.").

       This is not to say that in the case of tenants by the

entirety that implied acceptance by the fact of a purported

delivery will be sufficient to prove the validity of the deed,

                                13
for the consent of the grantee-spouse must be affirmative in

order to satisfy the requirement of mutual consent.    The

grantee-spouse's acceptance must be affirmative in order to

avoid any mischief that might result in the rare case where

conversion of an entirety ownership to a fee simple ownership

would not be beneficial to the grantee-spouse. 2   Accordingly,

we turn to consider whether the record in this case

establishes that Wanda affirmatively accepted the conveyance

from Douglas under the 1976 deed and, thus, gave her consent

to the dissolution of the tenancy by the entirety.

     Douglas’ unilateral execution of the 1976 deed plainly is

sufficient to establish his intent to divest himself of his

tenancy by the entirety ownership in the Fairway Drive

property in favor of a fee simple ownership in Wanda.

However, there is no evidence as to how, when or to whom the

deed was delivered, nor can it be established from the record

who caused the deed to be recorded in 1979.   As of 1979, at

     2
       For example, where the spouses are estranged, one spouse
might attempt to be divested of an interest in property that
was environmentally contaminated or otherwise undesirable by
surreptitiously recording a deed purporting to convey a fee
simple interest to a grantee-spouse. Such a deed would be
ineffective, however, because there would be no evidence of
mutual consent. Indeed, in such a case, even actual delivery
of the deed to and acceptance by the grantee-spouse in person
might not be sufficient if the evidence showed that the
acceptance was made without knowledge of the undesirable
nature of the property or other fraudulent purpose by the
grantor-spouse.

                               14
best there was only an implied delivery to and acceptance of

the deed by Wanda.

     Nevertheless, Wanda's execution in 1993 of a deed, trust

and will, which each addressed her ownership of the Fairway

Drive property as her separate property, is clear evidence of

her affirmative intent to accept the 1976 deed and thereby her

consent to the dissolution of the tenancy by the entirety to

create her fee simple ownership of the property.    The specific

reference in the 1993 deed to the conveyance to her by the

1976 deed removes any doubt that Wanda could have believed she

still was seized only of a tenancy by the entirety ownership

in the property.    Based on the record in this particular case,

there is sufficient evidence to establish the mutual consent

of Douglas and Wanda to the conversion of their tenancy by the

entirety ownership of the Fairway Drive property to the fee

simple ownership in Wanda.    Thus, the circuit court erred in

finding that the 1976 deed was not valid to accomplish its

object. 3   It then follows that the 1993 deed would likewise

have been valid to transfer Wanda's fee simple interest to the

trust.

     3
       Our resolution of this issue in William's favor moots
his further assignments of error challenging the circuit
court's failure to apply the doctrine of estoppel by deed or
to interpret the settlement agreement as waiving any claim by
the estate to the Fairway Drive property. Accordingly, we
express no opinion on those issues.

                                15
                         CONCLUSION

     For these reasons, we hold that the circuit court erred

in finding that the 1976 deed was ineffective and void.    We

will reverse the judgment of the court in favor of Wayne and

enter final judgment for William confirming that the Fairway

Drive property is the property of the trust, as is already

reflected in the land records of Tazewell County.

                                      Reversed and final judgment.

JUSTICE POWELL, with whom CHIEF JUSTICE LEMONS and JUSTICE
MIMS join, concurring.

     Although I agree with the outcome of this case, I cannot

agree with the majority’s rationale.    According to the

majority, evidence of mutual consent is all that is necessary

for one spouse to convey his interest in a tenancy by the

entirety to the other spouse.   I disagree with the majority

because, in my opinion, it ignores the fundamental nature of

tenancies by the entirety, creates an incorrect standard for

reviewing such conveyances, and unnecessarily creates an

exception to longstanding principles of law that could

potentially, as demonstrated by the facts at bar, create

uncertainty as to ownership.

     This Court has long recognized that “[n]either spouse can

by separate act make an absolute disposition of property they

                                16
hold as tenants by the entirety.”    Rogers v. Rogers, 257 Va.
323, 326, 512 S.E.2d 821, 822 (1999) (quoting Jones v.

Conwell, 227 Va. 176, 181, 314 S.E.2d 61, 64 (1984)).     This is

because tenancies by the entirety are based on the legal

fiction that husband and wife are one entity.    Id.   As husband

and wife are one, “neither [spouse] has an interest [in the

property] which can be conveyed.”    Vasilion v. Vasilion, 192
Va. 735, 742, 66 S.E.2d 599, 603 (1951).   Indeed, it is the

very fact that neither spouse has an individual interest in

the property that protects the tenancy by the entirety from

judgments against only one spouse.    Id. at 742-43, 66 S.E.2d

at 603-04.

     Notably, in the 1976 deed, Douglas purported to convey

“all of his interest” in the Fairway Drive property.    If

Douglas, as an individual, held any interest in the Fairway

Drive property which he could unilaterally convey, that

interest would be reachable by any of Douglas’ creditors.

Clearly, that is not the case because, as previously noted,

Douglas’ interest in the Fairway Drive property amounts to no

interest at all.   Thus, it is clear that Wanda and Douglas,

jointly as husband and wife, held all of the interest in the

Fairway Drive property.

     Notwithstanding the fact that Douglas had no individual

interest in the Fairway Drive property, “it is settled beyond

                               17
debate that . . . tenants by the entirety [have] no power to

alienate permanently their interest, unless they act[]

together.”    Jones, 227 Va. at 182, 314 S.E.2d at 65 (emphasis

added).     See also Vasilion, 192 Va. at 740, 66 S.E.2d at 602

(“When an estate by the entireties is once set up, neither

spouse can sever it by his or her sole act.”).     Given that

Douglas and Wanda’s actions in the present case occurred over

16 years apart, it can hardly be said that they acted

together.    Indeed, there is no evidence in the record that

Wanda was even aware of Douglas’ unilateral actions until she

executed the 1993 deed.

     Further, the majority fails to explain the state of the

property between the time it is conveyed by one spouse and the

time such conveyance is accepted by the other.     I recognize

that this may be of little consequence in a case where the

conveyance and acceptance occur simultaneously, but a coherent

doctrine must also account for cases like the present, where

the gap between unilateral conveyance and affirmative

acceptance is measured in years.      When does the tenancy by the

entirety actually terminate: on the date of the initial

conveyance, on the date the deed is recorded, or on the date

it is affirmatively accepted?    I recognize that such questions

may have little bearing on the present case, but they will

likely have significant ramifications in other areas of the

                                 18
law (e.g., tax, bankruptcy, etc.).    Furthermore, although the

majority addresses the need for an affirmative acceptance to

avoid the potential mischief a surreptitious conveyance could

cause, it fails to address the reverse situation, where the

grantee-spouse withholds affirmative acceptance to the

detriment of the grantor-spouse.

     I also take issue with the majority’s reliance on Wanda’s

acceptance of Douglas’ unilateral conveyance to demonstrate

the parties “mutual consent.”    Mutual consent, without more,

has never been recognized as a valid means for terminating a

tenancy by the entirety.   Indeed, the phrase “mutual consent”

has never once been mentioned in our entire jurisprudence on

tenancies by the entirety.

     It has been established law in this Commonwealth since

1825 that terminating a tenancy by the entirety requires “a

joint conveyance of the property.”    Vasilion, 192 Va. at 740,
66 S.E.2d at 602 (citing 2 Raleigh C. Minor, The Law of Real

Property, § 854 (1908)).     See also Thornton v. Thornton, 24

Va. (3 Rand.) 179, 183 (1825).    This is true regardless of

whether the property is being conveyed to one spouse or to a

third party.   While such an approach may appear to put form

over substance, in reality, it avoids all of the pitfalls

discussed above.   Both parties, along with any affected third

parties, will immediately know the state of the property

                                 19
ownership; there can be no gamesmanship in the form of

surreptitious conveyances or withheld acceptances; and the

“mutual consent” of both spouses is readily apparent in the

joint conveyance.

     Rather than relying on a strained interpretation of the

alleged 1976 conveyance from Douglas to Wanda, I would reverse

the judgment of the trial court based on the terms of the

November 30, 1995 settlement agreement (the “Settlement

Agreement”).   At the time Douglas entered into the Settlement

Agreement, Wanda had already passed away.   Therefore, Douglas

was the sole owner of the property because the tenancy by the

entirety had terminated with Wanda’s death.   At that point, he

was free to alienate his interest in the property, which he

did in the Settlement Agreement, with the exception of a life

interest.   In exchange, he received $81,869.63 in

consideration.   As Douglas only retained a life estate, he had

no interest to pass on to his heirs.   Accordingly, I concur

with the majority that a judgment confirming that the Fairway

Drive property is the property of the trust should have been

entered for William.

                               20