Daily Development for Wednesday, April 19, 2000

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

On a "slow news day," we offer these two little cases containing a "primer" on cotenancy relationships. Nothing really earthshaking.

COTENANCY; PARTITION: Where one cotenant paid more for taxes, insurance and repairs than other cotenant, sale proceeds on partition should not be allocated according to amounts paid, but onehalf to each party with cotenant making excess payments entitled to a credit for the other tenant's share of expenses.

Biondo v. Powers, 743 So.2d 161 (Fla.App. 4 Dist. 1999).

The parties were engaged to be married, and determined to invest jointly in Florida real estate. Each invested half of thd $268,500 due at closing, although title was conveyed only to Biondo. Simultaneously, Biondo executed a note in the principla amount of her half of the down payment, and stating further that "[a]ny and all monies received from sale of said property to be divided equally prorated as to invested amounts paid at closing this day." Powers also signed this note.

Powers thereafter paid off the $350,000 balance due on the purchase money mortgage. The court's report is silent as to whether Powers (who was not on the title) had signed the note. Powers also paid tax and insurance costs in excess of those paid by Biondo (in fact, it may be that she paid all such costs again an ambiguous report).

Some time later, apparently after their relationship was less likely to become a marital one, both parties, as joint tenants, executed deeds to themselves as tenants in common. Further, at this time Biondo gave Powers a note for $350,000 apparently representing the payoff of the purchase money mortgage, secured by the Biondo's cotenancy interest in the property.

Guess what? Later Powers sued to foreclose on the mortgage, which she claimed totalled almost $500,000. She claimed "special equity" in the property based upon her payment of certain axes and insurance as well as repairs to the property. In addition she paid off a judgment against the property rendered in a lawsuit by a broker against Biondo. The trial court appeared to view Powers as one half responsible for this judgment, so it may have resulted from the original acquisition of the property. The foreclosure suit got rolled into a gigantic partition action. Apparently the property, happily, had a value that would allow everyone to get some money.

In all, the trial court determined that Powers' contribution relative to Biondo's contribution bore a ratio of 85:15, and determined that their distributions at partition ought to reflect this ratio.

Biondo appealed, alleging that the parties should divide the proceeds of the partition sale 50/50 initially, since their cotenancy deeds reflected no other percentage, and that Powers was entitled to an offset against Biondo's share for the actual cash that she contributed to the property's mortgages, judgment, maintenance, taxes and insurance.

In the end, the court reversed the trial court and recognized Biondo's position. It appears to be supported somewhat by the original note the parties signed, but the court seems more interested in the notion that the cotenancy interest itself (which arose subsequent to the initial acquisition and signing of the note) reflected an equal cotenancy interest. Both courts appear to ignore the $350,000 mortgage and note given by Biondi, apparently viewing it as erroneous.

The court appeared to conclude that Biondo, as a benefitting cotenant, was obligated to pay one half of all the expenses that Powers paid.

Comment 1: The case is noteworthy because of the court's setting aside numerous bizarre statements of relationship drafted by the parties (and their counsel) and focussing on its perception of the true and equitable relationship. It is also noteworthy because Powers was entitled to reimbursement for a large number of expenses that she apparently paid voluntarily.

Comment 2: The court states that Biondi was legally obligated to reimburse Powers for her one half of the expenses that she paid, and this leads to a relatively easy conclusion that he preserved his one half interest in the property. The court doesn't look very hard at whether these payments made by Powers were "obligations," or voluntary payments. Biondi, a coventurer, apparently didn't object to them and even proposed himself that Powers was entitled to a one half share.

Other courts may be reluctant to give a "volunteer" cotenant a proportionate reimbursement of voluntary payments other than taxes, insurance and prior liens as to which all parties are liable. But the circumstances here made such ruling seem appropriate.

Biondo counterclaimed that the note he had signed was an error, and that in fact it should have been for only half the purchase money mortgage amount, since the other half was Powers' obligation all along.

COTENANCY; TAX REDEMPTION: Cotenant's redemption of property from tax sale in 1934, subsequent payment of taxes and possession of land was insufficient to obtain title by adverse possession from cotenants.

Ex Parte Walker, 739 So.2d 3 (Ala. 1999).

In addition to the plaintiff having the intriguing first name of "Pink," this case features a finding that a party in exclusive possession for more than sixty years, who paid taxes, tore down old buildings and cut down timber was not an adverse possessor.

The court found that the plaintiff commenced possession after redeeming the title at a tax foreclosure sale. At that time, he was an heir of the previous owner, who had failed to pay the taxes. In fact, plaintiff was one of a number of heirs of the decedent. The court held that, as all of the heirs were cotenants, the acquisition by the plaintiff of the tax title did not give him an absolute title, and that the other cotenants had a right to share in the ownership plaintiff had thus acquired by redemption. All they had to do was pay their pro rata share of the $40 that he paid to redeem the 80 acre parcel.

The appeals court upheld the trial court finding for the cotenants by concluding that there was evidence to support the conclusion that the other cotenants never had any knowledge of the tax redemption, and therefore didn't know that their cotenant was possessing adversely.

Comment: Although undoubtedly the plaintiff found the result startling, it is consistent with traditional rules. Most states recognize that cotenants have fiduciary relationships with one another, and a tax sale redemption results in a title held in a "contingent trust" (the editor's made up term) for the other tenants, who can join in by paying their share of the redemption price.

Here, that untoward result was combined with the other aspect of cotenancy relationships that possession by a cotenant normally is not deemed "hostile," even if exclusive, if the possessing cotenant does not notify the other cotenants that he is possessing under his own claim, rather than simply exercising his cotenancy right of possession.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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