Edward F. Hayes, Jr., Trustee of the Survivor’s Trust a C/U The Hayes Family Trust Dated January 20, 2000 v. James J. Connolly, Trustee of the Ann D. Connolly Living Trust

Civil Litigation

Sam Harkinson Previously employed as an Assistant County Attorney, and as an insurance adjuster, now as an associate at Hoefle, Phoenix, Gormley & Roberts

Sam Harkinson
Previously employed as an Assistant County Attorney, and as an insurance adjuster, now as an associate at Hoefle, Phoenix, Gormley & Roberts

No. 2018-0025
March 29, 2019
Affirmed.

  • Whether an otherwise unenforceable contract can nonetheless form a basis for a court order to partition a property that both parties to the former contract have an equal interest in.

Mr. Edward F. Hayes, Jr., Trustee to the Hayes Family Trust dated January 20, 2000 (Petitioner) appealed the decision of the Superior Court granting partition of a summer home jointly owned by the Petitioner and Mr. James J. Connolly, Trustee of the Ann D. Connolly Living Trust (Respondent).

The parties were the joint owners of a summer vacation property. At some point the Petitioner decided that it would like to dissolve, triggering a prior contract that dealt with what would happen upon the death or dissolution of either owner. Ultimately the trial court found that the prior contract was unenforceable as the parties had never had a meeting of the minds. After a site visit to the property, the trial court determined that a physical partition of the property would be impossible, and that the property should be sold, with the Respondent being given the option to purchase the Petitioner’s interest. In trying to determine how to set the value of the property, the trial court utilized the process that had been outlined in the now unenforceable contract.

The Petitioner appealed the decision to utilize the process that had been outlined in the unenforceable contract, arguing that the trial court had already found that the agreement was unenforceable, and also arguing that the property should be sold at an auction rather than a private sale. In rejecting this argument, the Court found that the trial court did not enforce the earlier contract, rather the trial court was performing its function as an equity court in attempting to fashion the fairest outcome. The Court found that the Petitioner had failed to show that the trial court’s ruling was unreasonable or untenable. The Court further found that it would have been unequitable for the Respondent to pay above what is fair market value for the property solely because the Petitioner had decided to dissolve and sell its interest in the property. The Court, therefore, concluded that the Petitioner, desiring to sell its interest in the property, would be relieved from its obligation and paid, and that the Respondent would be able to maintain its ownership of the property by payment to the Petitioner.

 

Mark S. Derby on the brief and David W. Rayment on the brief and orally, both of Cleveland, Waters and Bass, P.A. for the Petitioner. Robert J. Dietel on the brief and Samantha D. Elliott on the brief and orally, both of Gallagher, Callahan & Gartrell, P.C. for the Respondent.