Mitchell v. Fells
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Cite as 2010 Ark. App. 663
ARKANSAS COURT OF APPEALS
DIVISIONS II & III
No. CA 09-1193
Opinion Delivered
RANDALL AND DEMITA MITCHELL
APPELLANTS
OCTOBER 6, 2010
APPEAL FROM THE PULASKI
COUNTY CIRCUIT COURT,
TWELFTH DIVISION
[NO. CV-07-5646]
V.
HONORABLE ALICE GRAY, JUDGE
SARAH FELLS
APPELLEE
REVERSED AND REMANDED ON
DIRECT APPEAL; AFFIRMED ON
CROSS-APPEAL
JOHN B. ROBBINS, Judge
This is a reformation case involving real property sold by the sellers, appellants Randall
and Demita Mitchell, to the buyer, appellee Sarah Fells. The Mitchells owned “Lot 6, Block
23, Centennial” in Little Rock. That lot contains two houses: 1523 Wolfe on the western
90 feet of the lot, and 1716 West 16th on the eastern 50 feet of the lot. The central
controversy in this case is whether the parties intended their transaction to apply to only one
house or to both of these houses. The warranty deed prepared by Stewart Title and signed
by the Mitchells and recorded on January 10, 2006, conveyed to Ms. Fells the entire tract on
which both houses were situated. Specifically, the deed purported to convey “The east 50
feet and the west 90 feet of Lot 6.” After a corrected deed was recorded on January 3, 2007,
Cite as 2010 Ark. App. 663
which changed the description to include only the western 90 feet of the lot, Ms. Fells
brought an action against the Mitchells for slander of title. The Mitchells answered and
counterclaimed for reformation of the deed alleging that the parties intended that only one
of the houses, 1523 Wolfe on the western 90 feet of the lot, be included in the conveyance.
A jury trial was held, and the slander of title action was resolved against Ms. Fells by a
directed verdict and is not the subject of this appeal.
The trial proceeded on the
counterclaim, the jury found for Ms. Fells, and the trial court entered a judgment denying
the Mitchells’ claim for reformation. The trial court also denied the Mitchells’ posttrial
motion for judgment notwithstanding the verdict and a new trial. The Mitchells now
appeal, challenging the sufficiency of the evidence to support the jury’s verdict. Ms. Fells
cross-appeals, arguing that the trial court erred in not awarding her a judgment of $12,000
against the Mitchells for rents they wrongfully collected from a tenant living at 1716 West
16th after the property was conveyed. We reverse on direct appeal, and we affirm on crossappeal.
The facts of this case are as follows. Ms. Fells is in her 70s and is afflicted with
advanced diabetes, which confines her to her bedroom. She formerly rented a house near
the Little Rock Airport but was forced to relocate due to expansion of the airport facility.
That is when she entered into negotiations with the Mitchells to buy a house. The airport
provided Ms. Fells about $12,000 for her to relocate and also provided a home inspector
and appraiser. The home inspector and appraiser were directed by the airport’s representative
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to inspect and appraise, respectively, the house at 1523 Wolfe. The inspector identified
numerous defects at that house, which the Mitchells repaired. Subsequently the appraiser
appraised the property at 1523 Wolfe, west 90 feet of lot 6, at $52,500. The appraisal was
dated December 15, 2005, which was just a couple of weeks before the closing.
A couple of months before the appraisal, on October 26, 2005, the Mitchells and
Ms. Fells signed an “Offer to purchase real estate.” This document described the property
as 1523 Wolfe but more particularly described it as “Lot 6, Block 23, Centennial.” The
purchase price on that document was $56,500.
Sometime after the parties signed the “Offer to purchase real estate,” Ms. Mitchell
made some handwritten changes to the document. She added “West 90 feet of” in front of
“Lot 6, Block 23, Centennial.” She also crossed out the purchase price of $56,500 and
instead entered $52,500 so that the purchase price equaled the appraised value. All of the
parties, including Ms. Fells, signed their signatures next to these changes on the document.
In order to finance the transaction, which was for $52,500, Ms. Fells gave the
Mitchells a $12,789 down-payment provided by the airport, and she executed a note and
mortgage for the balance. The settlement statement identifies the property location as 1523
Wolfe.
When the Mitchells filed their counterclaim for reformation of the deed, they
requested that the deed be reformed so that title to the eastern 50 feet of Lot 6 remained in
them. In essence, the Mitchells claimed that this portion of the lot, which contained the
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house with the 1716 West 16th address, was never intended by the parties to be conveyed
and that the correct title should conform with the intentions of the parties. At the close of
the jury trial, the jury was given the following interrogatory:
Do you find that the Defendants have proven by clear and convincing evidence that
at the time the agreement was reduced to writing, both parties intended the legal
description in the deed to say the West 90 feet of Lot 6 Block 23 Centennial Addition
to the City of Little Rock, Arkansas and, by mutual mistake, it expressed something
different?
The jury returned a verdict of “No” to the above question. The trial court subsequently
entered a “judgment upon jury verdict” providing that the Mitchells failed to meet their
burden of proof as to a mutual mistake, and denying the Mitchells’ claim for reformation of
the deed.
After the trial court entered its order denying appellants’ claim for reformation, the
Mitchells filed a motion for judgment notwithstanding the verdict and for new trial, wherein
they alleged that the evidence did not support the verdict and the verdict was clearly contrary
to the preponderance of the evidence and the law. That motion was deemed denied, and
the Mitchells are now appealing from both the “judgment upon jury verdict” and the denial
of their post-trial motion.
At the jury trial, Ms. Fells testified that when she bought the property nobody told
her she was only going to get part of a lot. She stated that she thought she was buying a
house and a full lot. However, Ms. Fells also testified that she was just buying one house and
never thought she was buying a second house; that she believed the Mitchells only intended
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Cite as 2010 Ark. App. 663
to sell her the one house at 1523 Wolfe; that they never talked about the other house and
she did not even know it was on the lot until a year after the transaction; and that she did not
intend for the Mitchells to give her the second house. There was also evidence presented
at trial making it clear that the home inspection and appraisal relied on by the parties only
pertained to the house at 1523 Wolfe.
Ms. Mitchell testified that they lowered the selling price to match the appraised value
of the house at 1523 Wolfe, and that the parties never spoke about the house at 1716 West
16th. Ms. Mitchell indicated that the only house that Ms. Fells wanted to buy was the one
at 1523 Wolfe, and that that was the only house the Mitchells intended to sell. She said she
found out about the mistake when Ms. Fells’s son called complaining about being assessed
taxes on both houses. Mr. Mitchell confirmed in his testimony that they only intended to
convey one house, asserting that Stewart Title put the wrong description in the deed and that
he did not catch the mistake before signing it.
In this appeal, the Mitchells argue that the trial court erred in denying their counterclaim for reformation, and that the trial court should have granted their motion for judgment
notwithstanding the verdict because of an absence of evidence to support the verdict.
Alternatively, the Mitchells ask for a new trial on the basis that the jury’s finding that there
was no mutual mistake was clearly against the preponderance of the evidence.
In Statler v. Painter, 84 Ark. App. 114, 118–19, 133 S.W.3d 425, 428 (2003), we
wrote:
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Cite as 2010 Ark. App. 663
Reformation is an equitable remedy that is available when the parties have reached
a complete agreement but, through mutual mistake, the terms of their agreement are
not correctly reflected in the written instrument purporting to evidence the
agreement. A mutual mistake is one that is reciprocal and common to both parties,
each alike laboring under the same misconception in respect to the terms of the
written instrument. A mutual mistake must be shown by clear and decisive evidence
that, at the time the agreement was reduced to writing, both parties intended their
written agreement to say one thing and, by mistake, it expressed something different.
Whether a mutual mistake warranting reformation occurred is a question of fact.
(citations omitted).
The Mitchells argue that because of a draftman’s error the warranty deed incorrectly
purported to convey the entire Lot 6 to Ms. Fells. Appellants assert that from the evidence
it was clear that there was a mutual mistake and that both parties intended for Ms. Fells to
purchase only the house on the western 90 feet of the lot at 1523 Wolfe, and that the other
house and portion of Lot 6 was never contemplated by their agreement. Appellants note that
in her own testimony Ms. Fells agreed that she only intended to buy one house. And when
the agreement was reached, the purchase price was set using an appraisal of only the house
at 1523 Wolfe. Because the undisputed facts demonstrated a mutual mistake, the Mitchells
submit that the jury’s finding to the contrary was not supported by substantial evidence.
That being the case, appellants contend that the trial court erred in failing to grant either a
judgment notwithstanding the verdict or a new trial.
Pursuant to Arkansas Rule of Civil Procedure 50(e), a party who has the burden of
proof may appeal challenging the sufficiency of the evidence to support a jury verdict adverse
to that party, and may do so without making a directed-verdict motion to the trial court.
Where the sufficiency of the evidence to support a jury verdict is the issue on appeal, the
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Cite as 2010 Ark. App. 663
standard of review is whether the verdict is supported by substantial evidence.1 Dovers v.
Stephenson Oil Co., 354 Ark. 695, 128 S.W.3d 805 (2003); Schaeffer v. McGee, 286 Ark. 113,
689 S.W.2d 537 (1985). Substantial evidence is that which goes beyond suspicion or
conjecture and is sufficient to compel a conclusion one way or the other. Dovers, supra. In
the case at bar, we hold that there was no substantial evidence for the jury to conclude
anything other than that a mutual mistake was made and that both parties intended for the
sale to pertain only to the western 90 feet of the lot containing one house.
Prior to the sale, an inspector inspected only the house at 1523 Wolfe and identified
defects, which the Mitchells repaired. The property containing just that house appraised for
$52,500, which was used to set the purchase price in the parties’ agreement. A fence
separated the two houses, there were separate legal descriptions, and the houses were taxed
separately. In the written offer the correct legal description containing only the one house
was included by a written amendment signed by both parties. And Ms. Fells testified that
at all times she intended to buy only one house and indicated that she was unaware that Lot
6 even contained a second house until a year after the parties’ agreement was consummated.
When asked, “You don’t intend for them to give you a second house, do you?” Ms. Fells
answered “no.” She testified that she believed the Mitchells only intended to sell her one
1
The counterclaim for reformation is an equitable action and would not have been
subject to a jury trial determination, at least prior to passage of Amendment 80. However,
since neither party objected to the counterclaim being decided by a jury, we will apply the
standard of review applicable to jury trial verdicts.
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Cite as 2010 Ark. App. 663
house at 1523 Wolfe, that the house she moved into was the only one she thought she was
buying, and that they never discussed the other house. Both parties clearly and decisively
indicated in their testimony that a mutual mistake was made, and there was no rational basis
for the jury to conclude otherwise. Therefore, the trial court’s judgment denying the
Mitchells’ claim for reformation is reversed and we remand this case for entry of an order
reforming the deed to conform with the intentions of the parties.
Finally, we turn to Ms. Fells’s cross-appeal. There was testimony by Mrs. Mitchell
that after the conveyance occurred the Mitchells collected rent from a tenant living at the
other house on Lot 6. This rent was for $300 per month and totaled $12,000 from the date
of the sale until the reformation suit was decided in favor of Ms. Fells. Ms. Fells now argues
that the judgment entered by the trial court should have awarded her $12,000 against the
Mitchells for the rent they wrongfully collected from her tenant. However, we affirm the
cross-appeal because the Mitchells have prevailed on direct appeal of their reformation
action. When a contract is reformed, the decree relates back and takes effect from the date
of the original execution of the contract. See Hampton School Dist. v. Phillips, 251 Ark. 90,
470 S.W.2d 934 (1971).
Reversed and remanded on direct appeal; affirmed on cross-appeal.
HART, KINARD, GLOVER , and ABRAMSON , JJ., agree.
BROWN , J., concurs.
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