GLASSCOCK, Vice Chancellor.
This matter illustrates the lengths to which malign family relationships and mulish obstinacy, facilitated by the failure of parties to a land sale to record title with the Sussex County Recorder of Deeds, can carry litigants in this Court. Before me are cross motions for summary judgment in this action for quiet title. For the reasons that follow, the Petitioners' motion is granted and the Respondent's motion is denied.
This action is the third among these parties recently filed in this Court. The first, before Vice Chancellor Noble, was brought by the Respondent here, Vincent Branson. Vincent sought to establish his interest in a Branson family beach cottage (the "Cottage") as well as to obtain other relief arising from alleged misconduct of the executor in the Estate of Dorothea Branson (the "Estate"). Dorothea Branson was the mother of the current litigants. As will be described more fully below, Vincent
Subsequently, Vincent filed exceptions to the executor's Final Accounting in Dorothea's Estate. I dismissed that action, finding that the prior Memorandum Opinion established that Vincent was not "entitled to share in the distribution" of the Estate, and therefore was without standing to take exception under 12 Del. C. § 2303(d). Meanwhile, David Branson, individually, and as executor of Dorothea's Estate, and his brothers, Albert and Robert Branson, all Vincent's siblings, filed this action to quiet title. The Petitioners' contentions here rely solely on the prior Memorandum Opinion. That Opinion found that Vincent has no interest in the Cottage. Because Vincent's name remains on the title as recorded with the Sussex County Recorder of Deeds, the Petitioners seek an order removing Vincent's illusory recorded interest.
The following facts are taken from the factual findings of the prior Memorandum Opinion.
In 1979, Vincent, Albert, Robert and Theresa bought David's share, increasing the ownership interest of each to 25%. While this was a transaction for value, the parties did not bother to create, let alone record, a deed in evidence of the transaction. A few years later, Robert and Theresa gave their combined 50% interest in the Cottage to their mother, Dorothea. Again, the parties did not create a deed. Before 1990, Vincent sold his interest to Dorothea in exchange for forgiveness of a $25,000 debt. Again, unfortunately, and in retrospect foolishly, this transaction was not described by deed.
Dorothea died in 2001. Under the terms of her will, all of her Estate was left in equal shares to her five children. This included her 75% interest in the Cottage. The Estate also held stock and cash. As a beneficiary under the will, Vincent was entitled to a 15% interest in the Cottage (20% of Dorothea's 75%) and 20% of the other assets. On April 20, 2002, Theresa and her children disclaimed any interest in the Estate, raising the remaining siblings' interest to 25% of Dorothea's interest in the Cottage and in the liquid assets of the Estate. Vincent received early distributions totaling $110,000. According to the prior Memorandum Opinion, this was a "full and final distribution," in satisfaction of his interest in the Estate, including his interest in the Cottage.
Although the beneficial interest in the Cottage of each sibling (except for Albert) had been transferred to Dorothea during her lifetime, the siblings remained record titleholders of the Cottage. In late June or early July of 2004, David, Albert, Robert and Theresa each signed quitclaim deeds transferring their legal interest to David as executor of Dorothea's Estate. This transfer was apparently done to facilitate clear title and the sale of the property. Currently, then, equitable ownership is in David for the benefit of David, Albert and Robert. Record title remains in the siblings, in common.
Sometime in 1988 or thereafter, Vincent purchased stock from David in a start-up technology company, Novazen, Inc. David agreed to guarantee Vincent's investment or to indemnify him for any loss. Once again, as was common in Branson-family transactions, the guaranty was not put in writing. Vincent invested $85,000, in return for which he received what ultimately proved to be worthless stock. Vice Chancellor Noble found that David owed Vincent this amount, $85,000, as a result of the guaranty, but that the repayment obligation would not be triggered until the Cottage was sold.
In the litigation before Vice Chancellor Noble, Vincent sought to enforce what he contended was a promise by Robert, Albert and David to sell him the Cottage for $345,000. He also sought a declaration that he was an owner of 25% of the Cottage, in common, and denied that he had transferred that interest to his mother. Finally, he contended that the early distribution he received from the Estate was not a final distribution of his interest and that he therefore was entitled to a portion of the Cottage via inheritance. He sought a partition sale.
The Vice Chancellor denied all of Vincent's claims. The Court specifically found in the prior Memorandum Opinion that Vincent had no interest in the Cottage, that Vincent's siblings were under no contractual obligation to sell the Cottage, and that Vincent had taken his full distribution from the Estate in cash.
With respect to the $85,000 guaranty, the Court found that Vincent was contractually entitled to $85,000 from David "upon sale of the cottage."
Because they had not placed a timely request to quiet title before the Court in the context of the prior Memorandum Opinion, the Petitioners were forced to bring this separate action to quiet title. That is the matter before me: whether, as a result of Vincent's transfer of all his interest to his mother prior to 1990 in consideration for the release of a $25,000 debt, and due to the fact that he released any interest under Dorothea's will in return for a cash payment, Vincent's name should be removed from the title.
Vincent's response was to seek to interplead individuals whom he asserted might have an interest in the Cottage (excluding, obviously, the Petitioners) and to move for summary judgment on two grounds: (1) that Vice Chancellor Noble denied the Petitioners' prior request to quiet title, and therefore the current Petition was barred by res judicata, and (2) that the Petitioners had failed to give notice of their Petition "to the world."
I heard oral argument on all outstanding motions—including the Petitioners' Motion to Dismiss Vincent's Interpleader Petition—on January 24, 2013, at which point I denied Vincent's Motion for Summary Judgment and his Interpleader Petition, and, with the consent of Petitioners, limited their Petition to the request that Vincent Branson's name be removed from the title to the Cottage.
Summary judgment may be granted to the moving party when that party demonstrates that there is no issue of material fact, and that the moving party is entitled to judgment as a matter of law.
The Petitioners' Motion for Summary Judgment must be granted, because Vincent has no interest in the Cottage, and therefore no basis to resist removal of his name from record title to the Cottage.
In the litigation before Vice Chancellor Noble, Vincent argued that he retained his 25% interest in the property despite his transfer of that interest to his mother before 1990. He also argued that he has an interest in the property as a beneficiary under Dorothea's will. As noted above, those matters were conclusively decided in the prior Memorandum Opinion. Vincent transferred his interest in the property to his mother for consideration and thereafter retained no interest other than the bare record title which is the subject of this suit. In addition, the Court found that Vincent exchanged his interest in the Cottage arising under the will of Dorothea Branson for a cash distribution. Therefore, he obtained no interest in the Cottage under the will.
The prior Memorandum Opinion is res judicata as to Vincent's claims that he retains any ownership rights in the Cottage.
Vincent resists entry of such an order on a number of grounds, all of which are frivolous. First, Vincent argues that the prior Memorandum Opinion, which found that the Estate had not sought and therefore was not entitled to quiet title in that action, itself precludes the relief sought here under the rubric of res judicata. Nothing in the prior Memorandum Opinion
Next, Vincent alleges that "unclean hands" should prevent the order the Petitioners seek here. He contends that the Petitioners should be barred from receiving relief due to "perjury, abuse of process, breach of fiduciary duty . . . and the negligence of the Executor. . ." in the underlying Estate.
Finally, Vincent alleges that, notwithstanding the specific findings of the prior Memorandum Opinion, he does have a cognizable interest in the Cottage. Vincent points to the $85,000 Guaranty as basis for ownership in the Cottage, but Vice Chancellor Noble specifically denied him an equitable lien based upon the Guaranty. Vincent next argues that he has "a fiduciary duty to ensure that the beach home is distributed according to his mother's intent and Vincent would be subject to suit if he breached that duty,"
Finally, I address the Petitioners' request that I shift fees to the Respondent under Rule 11 and because the Respondent has litigated this matter in bad faith. As noted above, this litigation was partly prolonged by a poorly drafted Petition to Quiet Title. Vincent's decision to treat the Petition as an in rem action was not unreasonable. However, other arguments made by Vincent in this litigation were so obviously meritless that the only possible justification for making them was to delay resolution of this matter and so avoid the consequences of the prior Memorandum Opinion.
A prior decision of this Court found that Vincent transferred all the interest he held in the Cottage to his mother by 1990. The parties to that transaction, however, failed to file a deed or other document removing Vincent's name from the record title. It is therefore appropriate that an order of this Court be filed providing that such a transaction occurred and was effective nunc pro tunc. The order should also provide that any interest Vincent Branson received under the will of Dorothea Branson was waived by Vincent's receipt of a cash distribution in lieu of an interest in the Cottage. More than this, however, I cannot do. There is no in rem quiet title action before me. The Branson family, through its informal transfers of interest in the Cottage, both before and after Dorothea's death, created a mare's nest of title issues. Those issues may have been fully resolved in the prior Memorandum Opinion. However, this Memorandum Opinion addresses only the interests of Vincent Branson in the property. Because of the nature of this Petition, nothing in this Opinion shall be deemed to affect property rights in the Cottage other than those of Vincent Branson.
The Petitioners should provide a form of order consistent with this Opinion.
