BASHAM (DOROTHY), ET AL. VS. THE CITY OF BOWLING GREEN, KENTUCKY
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RENDERED: FEBRUARY 11, 2011; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-002232-MR
BOBBY JOE BASHAM
AND DOROTHY BASHAM
v.
APPELLANTS
APPEAL FROM WARREN CIRCUIT COURT
HONORABLE STEVE ALAN WILSON, JUDGE
ACTION NO. 07-CI-00974
THE CITY OF BOWLING
GREEN, KENTUCKY
APPELLEE
OPINION
AFFIRMING
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BEFORE: ACREE, CAPERTON, AND CLAYTON, JUDGES.
CLAYTON, JUDGE: This is an appeal from the Warren Circuit Court finding in
favor of the appellee, the City of Bowling Green, Kentucky (the City) in a dispute
over the purchase of property by the City from appellants, Bobby Joe and Dorothy
Basham. For the reasons that follow, we affirm the decision of the trial court.
BACKGROUND INFORMATION
The Bashams owned property in Bowling Green, Kentucky. They
owned a total of four tracts, each purchased on different occasions. Three of the
tracts were located adjacent to one another on College Street. The property was
purchased by the Bashams at an auction from two separate parties and the Bashams
took title to the properties by two separate source deeds. The property fronting on
College Street (the Cummings lot”) was transferred by deed from James
Cummings and recorded in the Warren County Clerk’s Office in Deed Book 600,
Page 819; the rear or flag shaped property (the “Brown lot”) was transferred by
deed from the Brown Estate and recorded in the Warren County Cclerk’s Office in
Deed Book 600, Page 821. The fourth tract was located on State Street, also in
Bowling Green. The Bashams conducted a wrecker service beginning in 1988 at
339 College Street and continuing until the purchase of the property by the City.
The Basham’s son, Jeff, operated an automobile repair business through August
2005 at 337 College Street.
The City approached the Bashams in 2004 about purchasing the
College Street property at 337 and 339 for the erection of a Recreation Center. An
appraisal was made of both 337 and 339 College Street by Leigh Ann Duncan
Parkinson. At the time of the appraisal, Dorothy accompanied Parkinson as she
examined the properties. Parkinson took photographs of the garage located at 339
College Street. Dorothy also provided Parkinson with a hand-drawn diagram of
the garage. The trial court found that Parkinson’s appraisal was based upon both
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the Brown and Cummings lots located at 339 College Street for a total of
$133,500. She valued the property located at 337 College Street at $85,500, so the
two properties together were valued at $219,000.
The City sent a letter to the Bashams with an offer to purchase the
properties for $219,000 plus relocation benefits. The parties eventually agreed to a
purchase price of $260,000 plus the actual cost of the relocation of the Bashams’
business. As a result of the agreement, the City’s attorney, Gene Harmon and his
paralegal, Tammy Wethington, drafted a “Real Estate Sale and Purchase
Agreement/Relocation Agreement” (the Purchase Agreement). This agreement set
forth that the City would purchase the property located at 337 and 339 College
Street from the Bashams. The Purchase Agreement then specifically set forth the
Deed Book and Page Numbers for 337 College and the Cummings lot located at
339 College Street. The Brown lot, also located at 339 College Street and
purchased separately by the Bashams, was not specifically mentioned by Deed
Book and Page Number.
After the Purchase Agreement was entered into (May 2, 2005), a
closing was held (May 11, 2005) and the construction of the Recreation Center was
completed on the site. The Bashams remained in possession of the properties
through August 1, 2005, in order to allow a sufficient amount of time to relocate
their business. The Bashams moved equipment, business records, tools, and
furniture from the garage located on the Brown lot to their new business location.
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They also removed vehicles which were stored on the Cummings lot as well as the
fencing that surrounded it.
Based upon eight written requests for reimbursement of costs
associated with the relocation of their business, the City paid an additional
$172,819.29 either to or on behalf of the Bashams. After demolition of the garage,
the City also performed environmental clean-up on the site at an additional cost of
over $55,000. The cost of building the Recreation Center was over 3 million
dollars. At no time during the relocation of the business, demolition and clean-up
nor the construction of the Recreation Center did the Bashams assert any type of
ownership over the tract at 339 College Street.
In June of 2007, an engineer conducted a survey of the facility and
determined that the deed did not specifically describe the Brown lot in the
conveyance of the two properties. Dorothy was then contacted by Wethington,
who requested she come sign a deed of correction. Dorothy thereafter contacted
her attorney and the next day the City received a letter from her attorney asserting
that the Bashams were the owners of the Brown lot and that they were willing to
sell or lease the property to the City.
The Bashams brought a declaratory judgment action in the Warren
Circuit Court for enforcement of the Purchase Agreement and Deed. The court
held a bench trial and made the following findings of fact:
Despite Dorothy Basham’s testimony to the
contrary, the Bashams’ actions indicate they also
believed that they had conveyed the entirety of 339
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College Street to the City. There was never any
discussion before or at the closing of the Bashams
retaining any portion of their property at 339 College
Street. Following the closing, the Bashams proceeded to
move all of their property (including built-in
bookshelves) from the garage and then gave the keys to
the building to the City and did not protest when the City
tore the building down. The Bashams’ relinquishment of
possession coupled with their silent acquiescence to the
City’s exercise of dominion over the Brown Lot clearly
indicates that the Bashams believed they had conveyed
the Brown Lot to the City. Additionally, the application
for and receipt of relocation benefits in excess of
$172,000, for moving Bashams Wrecker Service from
339 College Street confirms the Bashams’ intent to
convey to the City the property where their garage was
located—i.e., the Brown Lot.
The trial court then concluded that the Purchase Agreement and Deed were
ambiguous. As a result of this conclusion, the court went on to hold that:
Because the Purchase Agreement and deed are
ambiguous, this Court may consider all of the
circumstances surrounding the transaction to aid its
interpretation of the parties’ intent. . . . The Court
concludes that the parties mutually intended to convey all
of the Bashams’ property located at 339 College Street.
The Bashams then brought this appeal of the trial court’s decision.
STANDARD OF REVIEW
Kentucky Rules of Civil Procedure (CR) 52.01 provides that “[f]indings of
fact shall not be set aside unless clearly erroneous, and due regard shall be given
the opportunity of the trial court to judge the credibility of witnesses.” A judgment
is not “clearly erroneous” if it is “supported by substantial evidence[.]” OwensCorning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414 (Ky. 1998).
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Substantial evidence is “evidence of substance and relevant consequence, having
the fitness to induce conviction in the minds of reasonable men.” Id. Kentucky
State Racing Comm’n v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972) quoting O’Nan v.
Ecklar Moore Express, Inc., 339 S.W.2d 466, 468 (Ky. 1960).
“The construction and interpretation of a contract, including questions
regarding ambiguity, are questions of law to be decided by the court. First
Commonwealth Bank of Prestonsburg v. West., 55 S.W.3d 829, 835 (Ky. App.
2000). Hibbitts v. Cumberland Valley Nat. Bank & Trust Co., 977 S.W.2d 252,
254 (Ky. App. 1998). Questions of law are subject to de novo review. Western
Kentucky Coca-Cola Bottling Co., Inc. v. Revenue Cabinet, 80 S.W.3d 787, 790
(Ky. 2001). With these standards in mind, we examine the appellants’ arguments.
DISCUSSION
The Bashams begin their appeal with the argument that the trial court erred
in its refusal to apply the law of inverse/reverse condemnation to the proceedings.
They argue that when a “taking” has already occurred, a property owner may get
compensation through an inverse or reverse condemnation action. The City, of
course, argues that there is no need for such an action since it already purchased
the property.
As set forth above, the trial court held that there was an ambiguity in the
Purchase Agreement and Deed. We agree. “Any contract or agreement must be
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construed as a whole, giving effect to all parts and every word in it if possible.”
City of Louisa v. Newland, 705 S.W.2d 916, 919 (Ky. 1986). In the present case,
the Purchase Agreement set forth as follows:
WHEREAS, Sellers are the fee simple owners of
certain real property located at 337 College Street and
339 College Street, Bowling Green, Kentucky (the
“property”); and
WHEREAS, Sellers desire to sell and Buyer
desires to purchase the property, subject to the terms and
conditions more particularly set forth herein; and
WHEREAS, Tenant is made a party to this
Agreement due to Tenant’s eligibility for relocation
assistance,
NOW THEREFORE, in consideration of the
premises contained herein and for other good and
valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be
legally bound, Sellers, Tenant and Buyer do hereby agree
as follows:
1. Upon the terms and conditions set forth herein, Sellers
agree to sell and Buyer agrees to purchase for the sum of
$260,000.00, payable as set forth below, the property
acquired by deed recorded in deed book 708, page 324,
and deed book 600, page 819, (hereinafter collectively
referred to as the “property”).
Purchase Agreement at 1.
The first reference to the “property” is set forth as that property located at
337 and 339 College Street. Section 1, however, sets forth a second definition of
the “property” which is the property described in deed book 708, page 324 and
deed book 600, page 819. The second description does not include the property
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recorded in deed book 600, page 821. We agree with the trial court that this is an
ambiguity within the Purchase Agreement and subsequent Deed.
“Where a contract is ambiguous or silent on a vital matter, a court may
consider parol and extrinsic evidence involving the circumstances surrounding
execution of the contract, the subject matter of the contract, the objects to be
accomplished, and the conduct of the parties.” Cantrell Supply, Inc. v. Liberty
Mut. Ins. Co., 94 S.W.3d 381 (Ky. App. 2002) (Citations omitted). “A contract is
ambiguous if a reasonable person would find it susceptible to different or
inconsistent interpretations.” Id. (Citations omitted). We find that a reasonable
person reviewing the Purchase Agreement would find that the two different
definitions of “property” could be interpreted inconsistently. Thus, we agree with
the trial court that the Purchase Agreement and Deed were ambiguous and must
now determine the intent of the parties. “[O]nce a court determines that a contract
is ambiguous, areas of dispute concerning the extrinsic evidence are factual
issues[.]” Id. Thus, as set forth above, we will not overturn factual findings of the
trial court unless they are clearly erroneous.
In Hoskins Heirs v. Boggs, 242 S.W.3d 320, 327-28 (Ky. 2007), the
Kentucky Supreme Court held that:
It is generally recognized that where a deed contains both
a general and a particular description and contains no
language indicating which description shall prevail, the
general must yield [to] the particular. On the other hand,
where it is manifest from the entire instrument that the
general description, in view of the facts and
circumstances surrounding the transaction, most clearly
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reflects the intention of the grantor, the construction will
be adopted which gives it full effect. . . .
Moreover, “[i]n determining the intention of
the parties, courts look at the whole deed, along with the
circumstances surrounding its execution, and courts may
also consider the acts of the parties following the
conveyance.” Then, if the ambiguity is not resolved by
extrinsic evidence of the parties’ intentions, “[t]he rule is
. . . well settled that the deed will be construed most
strongly against the grantor and in favor of the grantee if
it admits of two constructions. (Internal citations
omitted).
In this case, the circumstances surrounding the execution of the Purchase
Agreement and Deed indicate that the City was interested in purchasing all tracts
of property owned by the Bashams located at 337 and 339 College Street. The
appraisal included all tracts and the purchase price of the property was more than
the appraised value.
While Dorothy asserted that she was not aware the appraisal was for all three
tracts, the evidence at trial indicated that she walked with the appraiser through the
garage and even gave her a hand-drawn diagram of the garage. The Bashams
completely moved their business from the all three lots, removed fences and
allowed the City to perform environmental clean-up on the property. The
construction of the three million dollar Recreation Center was allowed to take
place without any indication from the Bashams that they were the owners of the
Brown lot property.
There is nothing to indicate that the Bashams were unaware of the activities
of the City, in fact, Dorothy stated that they decided not to say anything because
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they were concerned the City would stall the permit process on the new business
location. She points to nothing, however, which would indicate these fears were
founded.
The trial court also weighed the fact that the Warren County PVA had
combined the tax bills for the Brown and Cummings lots after the Bashams had
purchased the property in finding that the general description of “property” was the
appropriate one in this case. Other than the testimony of the Dorothy Basham,
there is no indication from any actions between the parties that the Brown lot was
not included in the purchase price. It was not until the City asked Dorothy to sign
the Deed of Correction that the Bashams made a demand on the City for further
payment on the Brown lot.
We agree with the trial court that the Purchase Agreement and Deed were
ambiguous with regard to the definition of “property”. We also hold that the trial
court did not err in finding that the Brown lot was meant to be included in the
purchase of 337 and 339 College Street by the City from the Bashams. Thus, we
affirm the decision of the trial court.
ALL CONCUR.
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BRIEFS AND ORAL ARGUMENT
FOR APPELLANT:
Matthew J. Baker
Bowling Green, Kentucky
BRIEF FOR APPELLEE:
Greg N. Stivers
Scott D. Laufenberg
Bowling Green, Kentucky
ORAL ARGUMENT FOR
APPELLEE:
Greg Stivers
Bowling Green, Kentucky
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