Bernice Johnson v. Lisa Wilcox, Wayne McKaskle, and Eric McKaskle

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION

DIVISION IV

CA05-765

April 5, 2006

BERNICE JOHNSON AN APPEAL FROM FAULKNER COUNTY

APPELLANT CIRCUIT COURT

[NO. CV2004-163]

v.

HONORABLE MICHAEL MAGGIO,

LISA WILCOX, WAYNE McKASKLE, CIRCUIT JUDGE

AND ERIC McKASKLE

APPELLEES REVERSED AND REMANDED

Larry D. Vaught, Judge

Appellant Bernice Johnson appeals from a summary judgment declaring appellees to be the owners of a certain real-estate interest in Faulkner County. Because further factual development is needed, we reverse and remand.

Bernice was married to Thurman McKaskle, who died on December 13, 2000. Prior to their 1991 marriage, they executed a premarital agreement acknowledging, inter alia, that each had children from a prior marriage; that the couple wished to preserve their "separate non-marital property" for their children; that, during the marriage, each party would have the full and complete right to own, control, and dispose of his or her separate property, then owned or thereafter acquired, as if the marriage did not exist; that each party was free to dispose of his or her property upon death by will or by the laws of intestacy without any claim being made by the other as surviving spouse; and that, should Thurman predecease Bernice, she would have a life estate "in the home used during the marriage as long as [she] chooses to actually live there." The agreement reflected that, at the time of its execution, Thurman and Bernice each owned their own home.

According to Bernice's pleadings, in early 1996, she and Thurman sold their homes and placed a substantial portion of the sales proceeds-approximately $116,000 from Bernice and $350,000 from Thurman-into a jointly-owned account referred to as the "Construction Account." Shortly thereafter, Thurman purchased Lot 81, Windcrest Subdivision, City of Conway, using money from the account. The lot was deeded to Thurman and his three children, appellees Lisa Wilcox, Wayne McKaskle, and Eric McKaskle, as tenants in common. Bernice was not named on the deed. A residence was then built on the lot using money from the account.

Bernice and Thurman lived in the residence on Lot 81 until Thurman's death in 2000, and Bernice continued to live in there until August 2003.1 When she decided to move, appellees found a willing buyer and tried to sell the property, but Bernice refused to release her interest in it. To allow the sale to go through, an agreement was reached in which the approximately $177,000 in sale proceeds were placed in escrow pending resolution of the parties' dispute.

On February 23, 2004, appellees sued Bernice, asking the court to find that, by virtue of the premarital agreement, she had no interest in the proceeds from the sale of the property. Bernice, in an answer and counterclaim, along with subsequent amendments thereto, characterized the construction account as a tenancy-by-the-entirety account and alleged that Thurman's one-fourth interest in the subject realty, which was purchased with account funds, should be declared a tenancy by the entirety as well, and therefore exempt from the premarital agreement. She further claimed that Thurman committed fraud by, inter alia, not asking her permission to use tenancy-by-the-entirety funds to purchase Lot 81 and not disclosing that she was not named on the deed to Lot 81. Finally, she alleged that appellees would be unjustly enriched if they retained Thurman's one-fourth interest in the property because they contributed nothing to the construction of the house or the purchase of the lot. She prayed for judgment in the amount of one-fourth of the $177,000 in sale proceeds.

Appellees admitted that they had contributed nothing to the purchase of the property but denied Bernice's remaining allegations and particularly contended that her fraud claims, which they said arose in December 2000, were barred by the statute of limitations. Bernice responded that the statute of limitations did not apply to the extent that her fraud claims were merely seeking a set-off. See Ark. Code Ann. § 16-56-102 (Repl. 2005).

On October 20, 2004, appellees filed a motion for summary judgment. They argued, in relevant part, that the premarital agreement permitted Thurman to purchase assets and dispose of them without a claim being made by Bernice; that funds in a joint account, such as the construction account, may be withdrawn by either spouse and, once withdrawn, cease to be part of the marital estate; and that the money used to purchase Lot 81 and build the house thereon could be traced to funds from the sale of Thurman's separate home. Their brief in support cited a portion of Bernice's deposition in which her attorney stated that the house on Lot 81 cost $166,387 to construct and that checks totaling $114,000 had been written out of the construction account. However, the brief does not quote any testimony by Bernice in this regard; in fact, the record does not reflect that Bernice's deposition or any other affidavits or depositions were attached to appellees' motion.2

Bernice responded that summary judgment was inappropriate because four issues remained to be determined: 1) what was the effect of Thurman's unauthorized use of the tenancy-by-the-entirety funds to purchase Lot 81; 2) what was the effect of Thurman's use of the tenancy-by-the-entirety funds to construct the house; 3) did the premarital agreement apply to co-mingled property in the tenancy-by-the-entirety account; 4) would appellees be unjustly enriched by receiving Thurman's interest in the property. As attachments, she provided excerpts from her deposition, wherein she stated that she first became aware of the deed on Lot 81 after Thurman died and that Thurman "took care of the money" in their relationship.

Following a hearing, the trial court issued a letter ruling that Bernice's "argument that she has a dower right to the proceeds of the sale of the house was extinguished by the valid pre-marital agreement." The fraud, statute-of-limitations, and unjust-enrichment issues were not addressed. The court then issued an order on March 28, 2005, granting the motion for summary judgment and directing that the real-estate sale proceeds be paid to appellees. Bernice filed a timely notice of appeal from that order.

Our standard of review for summary-judgment cases is well established. Summary judgment should be granted only when it is clear that there are no genuine issues of material fact to be litigated, and the moving party is entitled to judgment as a matter of law. Ginsburg v. Ginsburg, 353 Ark. 816, 120 S.W.3d 567 (2003). The purpose of summary judgment is not to try the issues, but to determine whether there are any issues to be tried. Id. On appellate review, we determine if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion leave a material question of fact unanswered. See id. We view the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties. Id. Moreover, if a moving party fails to offer proof on a controverted issue, summary judgment is not appropriate, regardless of whether the nonmoving party presents the court with any countervailing evidence. Id. Our supreme court has also held that summary judgment is premature where factual development of a crucial issue is lacking. See Spears v. City of Fordyce, 351 Ark. 305, 92 S.W.3d 38 (2002); Waire v. Joseph, 308 Ark. 528, 825 S.W.2d 594 (1992).

We believe that summary judgment was prematurely granted in this instance. The threshold issue of whether the construction account, and consequently Thurman's one-fourth real-estate interest, were held as tenancies by the entirety cannot be decided on the record asit now stands. Once property is placed in the names of both husband and wife without specifying the manner in which they take, such property is presumed to be held by them as tenants by the entirety. See, e.g., Jablonski v. Jablonski, 71 Ark. App. 33, 25 S.W.3d 433 (2000); Creson v. Creson, 53 Ark. App. 41, 917 S.W.2d 553 (1996); Mathis v. Mathis, 52 Ark. App. 155, 916 S.W.2d 131 (1996). Additionally, when money from a tenancy-by-the-entirety account is used to acquire other property, that property may also be held as a tenancy by the entirety. See Mathis, supra (holding that, where the husband received personal retirement benefits and placed them in a joint account, then placed part of them in IRA accounts in his own name, the IRA accounts were held as tenancies by the entirety). To rebut this presumption, the party claiming the property as separate property must present clear and convincing evidence that there was no intent to make a gift of the property to the spouse. See Jablonski, supra. However, the existence of a tenancy by the entirety is a presumption and not conclusive. Factors such as whether the particular money used to make the purchase can be traced to one party's separate property; the time between the deposit of the separate funds and their withdrawal; and whether both spouses had equal access to the account have been considered, among others, in determining whether the presumption was rebutted. See Jackson v. Jackson, 298 Ark. 60, 765 S.W.2d 561 (1989); Jablonski, supra; Creson, supra; Mathis, supra.

In the case at bar, the evidence has not been developed to the point that it can be determined whether the construction account and Thurman's purchases therefrom were tenancies by the entirety. Because we view this determination as crucial to the question of whether the subject property is covered by the premarital agreement, we reverse and remand for further proceedings. See Spears, supra; Waire, supra.

Reversed and remanded.

Gladwin and Crabtree, JJ., agree.

1 Bernice had married Norman Johnson in November 2001.

2 We note that, in a subsequent attempt to dismiss Bernice's fraud claim on the basis of the statute of limitations, appellees provided an affidavit averring that Bernice knew in December 2000 that the deed did not have her name on it.