Court Opinion

ID: 9383824
Source: CourtListenerOpinion
Date Created: 2023-03-31 14:04:51.329654+00
Date Added: 2024-06-11T17:17:48.492767
License: Public Domain

RENDERED: MARCH 24, 2023; 10:00 A.M.
                        NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2021-CA-0996-MR

MIKE STACY, II                                                       APPELLANT

                    APPEAL FROM PIKE CIRCUIT COURT
v.                 HONORABLE EDDY COLEMAN, JUDGE
                         ACTION NO. 20-CI-01217

WILLIAM I. STACY AND
GENEVIVE J. STACY                                                     APPELLEES

                                   OPINION
                                  AFFIRMING

                                  ** ** ** ** **

BEFORE: DIXON, MCNEILL, AND TAYLOR, JUDGES.

TAYLOR, JUDGE: Mike Stacy, II, brings this appeal from a June 30, 2021,

Findings of Fact, Conclusions of Law and Judgment of the Pike Circuit Court

rescinding a deed that conveyed certain real property from William I. Stacy and

Genevive J. Stacy to Mike Stacy, II. We affirm.

            The relevant underlying facts were set forth by the circuit court as

follows:
1. [William and Genevive], natural grandparents of the
Defendant, Mike, adopted him and raised him from
infancy. The Plaintiff, William I. Stacy[,] is 77 years of
age, has been married to the other Plaintiff [Genevive]
for 55 years and has very limited reading skills. He went
to the second or third grade in school.

2. About 18 years ago [William and Genevive] acquired
the subject property, lived in an older house on it, built a
newer house and moved to it and turned the old house
over to [Mike].

3. The night before the deed which is the subject of this
action was executed, the Plaintiff[,] William Stacy[,]
approached [Mike] with his decision to provide [Mike]
with a deed to the old house, with [William and
Genevive] keeping the new house for a place to live.
[Mike] asked for all the property to be deeded to him
with the promise to [William and Genevive] that they
could live there as long as you live. It was then agreed
that [Mike] would be deeded the entire place with
[William and Genevive] reserving a lifetime interest for
each of them. [William and Genevive] testified and the
Court believes that the parties discussed the agreement
for [William and Genevive] to live on the property during
their life in the car ride to the attorney’s office the next
day. At all discussions mentioned in the evidence,
including the night before the deed, and during the car
ride on the way to Pikeville to prepare the deed, [William
and Genevive] stressed the need and their understanding
that any deed would reserve their right to live on the
property. The Court believes and finds that [William and
Genevive] did not give this property to their child
without consideration and including their only residence
without intending to reserve a life estate.

4. The parties came to town and a deed was prepared,
without reservation of life interest, without right of power
of rescission or revocation, and with no protection for
[William and Genevive] from the eviction which [Mike]

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             later sought, all unbeknownst to [William and Genevive]
             who said they had trusted [Mike] to see to having that put
             in the deed and did not read it. [Mike] readily admits a
             promise, at least orally, to [William and Genevive] that
             they could live there on condition that they keep the
             peace, not cause trouble and abide by the same
             restrictions his parents had put on him when they let him
             live in the old house.

             5. The deed itself is of record in Deed Book 1061[,]
             Page 121, Pike County Court Clerk’s Office, dated
             March 22, 2018. [William and Genevive] did not have a
             copy and only reviewed it in the clerk’s office after
             receiving an eviction notice [from Mike].

June 30, 2021, Findings of Fact, Conclusions of Law and Judgment at 1-3.

             On August 11, 2020, William and Genevive filed a complaint in the

Pike Circuit Court against Mike. Therein, William and Genevive alleged that

“[e]ither by mutual mistake, with neither party knowing the deed was incorrect, or

because of mistake on the part of [William and Genevive] and misconduct or fraud

on the part of [Mike], the deed as prepared and delivered did not reserve such a life

interest.” August 11, 2020, Complaint at 2. William and Genevive sought

rescission and/or reformation of the deed.

             The circuit court heard this matter without a jury. Kentucky Rules of

Civil Procedure (CR) 52.01. By Findings of Fact, Conclusions of Law and

Judgment entered June 30, 2021, the circuit court concluded that a “mistaken

conveyance” occurred and the proper remedy was to rescind the deed that

transferred the real property from William and Genevive to Mike without

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reservation of a life estate for William and Genevive. June 30, 2021, Findings of

Fact, Conclusions of Law and Judgment at 5. Thereafter, the court directed the

Master Commissioner to “reconvey the property to [Mike], but to reserve in behalf

of [William and Genevive] or the survivor a lifetime interest in the portion known

to the parties as the ‘new house[.]’” June 30, 2021, Findings of Fact, Conclusions

of Law and Judgment at 5. This appeal follows.

             To begin, when an action is tried by the circuit court without a jury,

CR 52.01 requires the court to specifically set forth separate findings of fact and

conclusions of law. Brown v. Shelton, 156 S.W.3d 319, 321 (Ky. App. 2004). CR

52.01 provides that “[f]indings of fact, shall not be set aside unless clearly

erroneous, and due regard shall be given to the opportunity of the trial court to

judge the credibility of the witnesses.” Following a bench trial, the circuit court

entered detailed findings of fact and conclusions of law. In our review, a finding

of fact is not clearly erroneous if supported by substantial evidence. Moore v.

Asente, 110 S.W.3d 336, 354 (Ky. 2003). Substantial evidence is evidence that

“has sufficient probative value to induce conviction in the mind of a reasonable

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

proceeds accordingly.

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             Mike asserts that the circuit court erred by rescinding the deed. More

particularly, Mike believes the circuit court erroneously determined there was a

mistake in the formation of the deed that provided the basis for rescission.

             In Kentucky, it is well-established “that Courts will rescind a deed on

evidence that is insufficient to warrant a reformation.” Struve v. Lebus, 136

S.W.2d 554, 557 (Ky. 1940). A party seeking rescission must demonstrate either

“a mistake on one side and unconscionable conduct on the other,” or a mistake “of

such a fundamental character that it was evident that the minds of the parties did

not meet.” Id. at 557. This long standing principal of law in Kentucky was

discussed thoroughly in Fields v. Cornett, 70 S.W.2d 954, 957 (Ky. 1934).

             In Fields, the seller sold the buyer a tract of real property consisting of

approximately 200 acres with the covenants of general warranty. Fields, 70

S.W.2d 954. Thereafter, it was determined that the tract actually consisted of only

125 acres, and the coal and mineral rights had been previously severed. As the 125

acres actually conveyed consisted of unimproved mountainous terrain with no

mineral estate, the Fields Court held that the mistake in the conveyance was of

such a fundamental character that rescission of the deed was warranted. Id.

Ultimately, the Fields Court rescinded the deed upon the basis of unilateral mistake

as the minds of the parties did not meet.

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             In the case sub judice, it is uncontroverted that in March of 2018,

William went to the old house to inform Mike that he had decided to convey the

real property upon which the old house was located to Mike. William explained to

Mike that William and Genevive would need to keep the new house so he and

Genevive would have a place to live for the remainder of their lives. Mike then

recommended to William that he should convey all of the real property to Mike

with the promise that William and Genevive could live in the new house upon the

property as long as they lived. William ultimately agreed he would deed the entire

property to Mike but would reserve a life estate in the real property upon which the

new house was located for himself and Genevive. The following day, Mike,

William, and Genevive traveled to an attorney’s office to have a deed prepared.

The circuit court found that during the drive to the attorney’s office, William again

stressed to Mike the need to reserve the right of William and Genevive to live upon

the property in the new house for the remainder of their lives. And, Mike admitted

at trial that he promised William and Genevive that they could live on the property

during their lifetime.

             Based upon our review of the record, we conclude there was

substantial evidence that a mistake occurred in the deed preparation and this

mistake was of a fundamental character that evidences that the minds of the parties

did not meet in this transaction. William and Genevive would not have conveyed

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the property to Mike without reserving a life estate for each of them. We agree

with the circuit court that rescission of the deed was the proper remedy as the

minds of the parties did not meet. See Fields, 70 S.W.2d at 958. Accordingly, we

conclude there was substantial evidence of a probative value to support the circuit

court’s findings of fact and that the circuit court did not err as a matter of law in

rescinding the deed.

             We view any remaining contentions of error to be moot or without

merit.

             For the foregoing reasons, the Findings of Fact, Conclusions of Law

and Judgment of the Pike Circuit Court is affirmed.

             ALL CONCUR.

 BRIEFS FOR APPELLANT:                      BRIEF FOR APPELLEES:

 Brian Cumbo                                Lawrence R. Webster
 Inez, Kentucky                             Pikeville, Kentucky

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