KEY FINANCIAL SERVICES v. ROBERT TESTA, as Administrator of the Estate of Jesse Oliver, Jr., C.T.A. and Robert Oliver, Sr., and his assignee, Dixon 5 Associates No: PC
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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS
PROVIDENCE, SC
Filed December 15, 2006
:
:
vs.
:
:
ROBERT TESTA, as Administrator of :
the Estate of Jesse Oliver, Jr., C.T.A.
:
and Robert Oliver, Sr., and his assignee, :
Dixon 5 Associates
:
SUPERIOR COURT
KEY FINANCIAL SERVICES
C.A. No. PC 05-3234
DECISION
GIBNEY, J. This matter is before the Court on plaintiff Key Financial Service’s (Key
Financial) Motion for Summary Judgment. The Defendants1 object to this motion.
Facts and Travel
On August 19, 1988, Jesse Oliver, Jr. the owner of property located at 5 Dixon
Avenue in Bristol, RI (the “Property”), died. Before his death, he had written a will (the
“Will”), under which he bequeathed the Property to Robert Oliver, Sr. (Robert).
Additionally, the Will named Robert as Executor of the estate. Shortly thereafter, Robert
executed a promissory note and mortgage on the Property in the amount of $122,000. On
April 6, 1989, the promissory note and mortgage were assigned to the plaintiff in this
case, Key Financial Services (Key Financial). Approximately two weeks later, on April
21, 1989, Robert issued an executor’s deed to himself and procured the remaining
interests in the Property via a deed issued by Mary Carlone, who had been granted a life
estate in the Property under the Will.
1
The present Administrator of the estate, Robert Testa, is only a placeholder for the purposes of this civil
action. The actual defendants in interest of this case, Robert Oliver Sr. and his assignees (collectively,
“Defendants”), did not object to this appointment.
1
Subsequently, however, it was revealed that Robert had never posted the bond
required by his appointment as Executor of Jesse Oliver’s estate.
Consequentially,
Augustine Smith (“Mr. Smith”) moved the Bristol County Probate Court (Probate Court)
to remove Robert as Executor and appoint himself as administrator in his place. The
Probate Court granted the petition on February 5, 1991, and thereafter Mr. Smith filed an
affidavit in the Town of Bristol Land Records declaring that the executor’s deed issued
by Robert as null and void. On March 1, 2001, Mr. Smith died before any action
regarding the executor’s deed could be taken in the Probate Court. In his place, the
Probate Court appointed Robert Testa (Mr. Testa) as administrator on June 16, 2005.
Robert Oliver then defaulted on the promissory note assigned to Key Financial,
and, as a result, Key Financial brought suit against him in this Court. The Court awarded
partial summary judgment for Key Financial in the amount of $203,148.89. Execution
was issued against Robert Oliver, and the Property was levied by Sheriff’s action. Key
Financial pursued the levy sale, and on November 27, 1996, it obtained all right and title
held by Robert in the Property. The Sheriff’s Deed of Execution Sale was issued on
March 5, 1998.
On July 1, 2005, Key Financial filed this action against Robert Testa, as
Administer of the Estate of Jesse Oliver, Jr., and Robert Oliver, Sr., seeking to quiet title
as to any claims Robert Oliver Sr. may have to the Property. In response, Defendants
argue that the title of the property never passed to Key Financial, and it still remains in
the estate of Jesse Oliver, Jr.
Key Financial has now moved for summary judgment.
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Standard of Review
The Court will grant a motion for summary judgment when, after “viewing the
facts and all reasonable inferences therefrom in the light most favorable to the
nonmoving party, the court determines that there are no issues of material fact in
dispute[.]” Tavares v. Barbour, 790 A.2d 1110, 1112 (R.I. 2002) (citations omitted). The
moving party bears the initial burden of establishing that no genuine issues of material
fact exist; if it does so successfully, then the burden shifts to the nonmoving party. Heflin
v. Koszela, 774 A.2d 25, 29 (R.I. 2001). If the nonmoving party can demonstrate that an
issue of material fact exists, the motion will be denied. Palmisciano v. Burrillville
Racing Ass'n., 603 A.2d 317, 320 (R.I. 1992) (citations omitted).
Analysis
The issue in this case is whether Robert’s execution of the promissory note and
mortgage were within his power as a devisee, thus making those encumbrances, and the
ensuing levy sale, valid. Key Financial argues that Robert Oliver, as devisee, was
entitled to mortgage his property. In contrast, Defendants argue that the Property is still
owned by the estate of Jesse Oliver, and they rely on several arguments to support this
assertion.
First, Defendants argue that the executor’s deed Robert issued to himself should
be declared null and void. First, they argue that because Robert was never qualified as
Executor of the estate, he had no power to issue an executor’s deed. Furthermore, they
argue that under R.I.G.L. 1956 § 33-12-62, even if Robert had been qualified as Executor,
2
Section 33-12-6, in its entirety, provides:
“The executor or administrator may sell the real estate of a deceased person despite the sufficiency
of the personal property to pay the debts, funeral expenses and the items above enumerated
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he would not have been able to transfer the property from the estate without permission
of the Court, which he never received. In addition, Defendants argue that the Probate
Court’s February 5, 1991 decree amounted to a finding that Robert’s issuance of the
executor’s deed was illegal and therefore invalid. In this Decree, the Probate Court
stated, in part, that as “. . . [Robert Oliver] has not filed a bond, has not filed an inventory,
and has improperly conveyed real estate and has not qualified by law for appointment, he
is forthwith removed.” Decree of Probate Judge Raymond A. Thomas of the Town of
Bristol, in the Estate of Jesse Oliver, Jr., No. 88-68.
Defendants contend that the
abovementioned “improperly conveyed real estate” refers to Robert’s transfer of the
Property to himself by executor’s deed.
The Defendants’ reliance on these arguments, however, is misplaced.
In
DiCristofaro v. Beaudry, 113 R.I. 313, 319; 320 A.2d 597, 601 (1974), the Rhode Island
Supreme Court held that “[t]itle to real property vests immediately upon a testator’s death
in the devisees.” Thus, upon the death of Jesse Oliver, title to the Property immediately
vested in Robert as the devisee, and did not need to be transferred to him by an executor’s
deed. Robert’s failure to meet his required duties as Executor, therefore, did not affect
this interest in the land as a devisee. Regardless of the validity of the executor’s deed,
Robert, as the devisee and owner of the Property, was free to execute a promissory note
and mortgage on it.
In response, however, the Defendants argue that the instant case provides an
exception to this general principle. They claim that the land did not vest at the moment
whenever in the discretion of the probate court this action seems desirable in effecting a prompt
and efficient settlement of the estate; provided, however, that this authority shall not be given with
reference to real estate specifically devised, unless the specific devisees consent in writing thereto.
An executor with a valid power of sale under a will may convey specifically devised property with
the written consent of the specific devisee.”
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of Jesse Oliver’s death because it was still subject to being sold to pay the debts of the
estate. This argument fails as well. The fact that a piece of property may be needed to
pay the debts of the estate does not prevent the title from vesting immediately upon the
death of the testator. See Votolato v. McCaull, 80 R.I. 301, 306 (R.I. 1953), Honeymail
v. Kelliher, 20 R.I. 564, 40 A. 499 (1898). In Votolato, the Rhode Island Supreme Court
found that “the legislature in enacting R.I. Gen. Laws § 33-12-6 has created in the
devisee a fee simple subject to defeasance. Title to real property vests immediately upon
a testator's death in the devisees. However, the title to such real estate is subject to
defeasance, in that if an executor or administrator wishes to sell the property for the
prompt and efficient settlement of the estate, he may do so with the probate court's
permission.” Id. Thus, the fact that the Property is still subject to the debts of the estate
does not prevent it from vesting immediately to Robert upon the death of Jesse Oliver, Jr.
Secondly, Defendants argues that, even as a devisee, Robert could not have
encumbered the Property under Section 33-13-3, which holds that
“[n]o heir or devisee of a deceased person shall have
power, within two (2) years and six (6) months after the
first publication of the notice of the qualification of the first
executor or administrator on the estate of the deceased
person, to incumber or alien the real estate of the deceased
so as to prevent or affect the sale of the real estate by the
executor or administrator, if necessary, as prescribed by
law. . .”
Defendants argue that under this statute, even if the Property had vested in Robert at the
time of Jesse Oliver’s death, he was statutorily barred from encumbering it for two and a
half years after the Executor was qualified. When the mortgage and note were executed,
argues Defendants, Robert had not been qualified as Executor, and thus the time period
had not yet even begun to run.
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However, Section 33-13-3 is inapplicable to the instant case. That statute bars
encumbrances which are designed to “prevent or affect the sale of the real estate by the
executor,” and there is absolutely no evidence that the mortgage in this case was issued
for this purpose.
Thus, Robert was acting within his power as devisee when he
encumbered the property with a mortgage.
Additionally, the Court’s conclusion is further bolstered by this Court’s award of
$203,148.89 to Key Financial when Robert defaulted on his obligations. Had the Court
not found that mortgage proper in that action, it would not have issued the judgment.
Furthermore, in its Order Granting Key Financial Service Relief from the Automatic Stay
To Continue with Eviction Action, the United States Bankruptcy Court allowed Key
Financial to complete the eviction proceedings with respect to the Property, essentially
finding that Key Financial had proper title to the Property. Had the mortgage and
promissory notes been improperly issued, then these courts would not have confirmed
Key Financial’s right to the Property.
Conclusion
In conclusion, the Court finds that Robert’s execution of the promissory note and
mortgage on the Property were well within his power as devisee. His interest in the
Property was never defeased by the estate of Jesse Oliver, and, as a result, Plaintiff
lawfully obtained title to the Property at execution sale. Accordingly, summary judgment
is granted to Key Financial on its claim to quiet title in the Property as it related to the
Defendants, Robert Oliver, Sr. and 5 Dixon Ave. Associates.
6
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