DOUGLAS L. ANDERSON; MICHAEL ALEXANDER ANDERSON; PATRICIA ANDERSON; PAULETTE ANNABELLE ANDERSON; ROBERT B. ANDERSON; FREDERICK BAILE; SHARON A. ANDERSON BAILE; CHARLES F. BINFORD, EXECUTOR OF THE ESTATE OF ARFET HORNBECK HODGE; FRANK E. BINFORD, JR.; ETHEL HORNBECK BURKHOLDER; WILLIAM RAY BURKHOLDER; JEANETTE HORNBECK DOWELL; BARBARA FELDMAN; LEONARD FELDMAN; RUTH HORNBECK HOLST; LUCH HORNBECK; JOYCE MANUEL; ANN M. MCKAIG; ANN M. MCKAIG, JR.; JOSEPH REID; LAURAINE REID; ELEANOR YOUNG; AND JAMES YOUNG; v. STANLEY EARL HORNBECK; LINDA HORNBECK; AND ROBERT C. FURR
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RENDERED: February 2, 2001; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-003185-MR
DOUGLAS L. ANDERSON;
MICHAEL ALEXANDER ANDERSON;
PATRICIA ANDERSON;
PAULETTE ANNABELLE ANDERSON;
ROBERT B. ANDERSON;
FREDERICK BAILE;
SHARON A. ANDERSON BAILE;
CHARLES F. BINFORD, EXECUTOR
OF THE ESTATE OF ARFET
HORNBECK HODGE;
FRANK E. BINFORD, JR.;
ETHEL HORNBECK BURKHOLDER;
WILLIAM RAY BURKHOLDER;
JEANETTE HORNBECK DOWELL;
BARBARA FELDMAN;
LEONARD FELDMAN;
RUTH HORNBECK HOLST;
LUCH HORNBECK;
JOYCE MANUEL;
ANN M. MCKAIG;
ANN M. MCKAIG, JR.;
JOSEPH REID;
LAURAINE REID;
ELEANOR YOUNG; AND
JAMES YOUNG;
APPELLANTS
v.
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE STEPHEN P. RYAN, JUDGE
ACTION NO. 94-CI-001755
STANLEY EARL HORNBECK;
LINDA HORNBECK; AND
ROBERT C. FURR
APPELLEES
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE:
BUCKINGHAM, GUIDUGLI AND HUDDLESTON, JUDGES.
GUIDUGLI, JUDGE.
Douglas L. Anderson, et al., appeal from an
order of the Jefferson Circuit Court granting the motion of
Stanley Earl Hornbeck, et al., to compel the closing of a real
estate purchase agreement.
We reverse and remand.
This action was originally filed in 1994 by multiple
parties seeking to bring about the sale and division of a 60 acre
parcel of real property located in Jefferson County, Kentucky.
The parties ultimately settled the action by entering into an
agreement which provided that one group of title holders, namely
Douglas L. Anderson, et al., (hereinafter referred to as
"Sellers"), would sell their interest in the parcel to the
remaining group of title holders, namely Stanley Earl Hornbeck,
et al., (hereinafter referred to as "Buyers").
The settlement
agreement provided in relevant part that the purchase price would
be $373,000 and that time was of the essence.
The numerous
signatures required to bring about the settlement were obtained
in 1994 and 1995.
One of the sellers, James Hornbeck ("James"), filed for
Chapter 7 bankruptcy in 1994.
On November 17, 1995, the
bankruptcy court entered an order approving the trustee's motion
to sell James' interest in the parcel.
Thereafter, the Sellers'
attorney, Walter Collins ("Collins"), began posting a series of
correspondences to the Buyers seeking to arrange a closing date.
The first of these letters was posted on or about
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October 10, 1995, and other letters followed through October,
1996.
The letters, which are contained in the record, sought to
bring about a closing, and expressed Collins' frustration at the
Buyers' apparent unwillingness to move forward on the matter.
Ultimately, Collins concluded that the Buyers no longer wished to
purchase the parcel, and Collins advised the Buyers that the
Sellers would begin seeking a third-party purchaser.
In mid-to-
late 1996, the Sellers apparently located a new purchaser.
In October, 1995, the circuit court dismissed the
instant action for lack of prosecution.
The Sellers, through
counsel, responded by filing a motion to revive.
In support
thereof, Collins filed an affidavit stating in relevant part as
follows:
"In summary, affiant [Collins], having once believed, in good
faith, that there was an agreement between plaintiffs and
defendants concerning settlement of this action, has now, with
reluctance, come to conclusion that said settlement is no longer
in effect, and that plaintiffs [Sellers] must proceed with this
action."
Collins then withdrew as counsel for all Sellers except
the bankrupcty trustee and Lucy Hornbeck.
The motion to revive
was granted, and the matter proceeded in circuit court.
On January 22, 1997, the Buyers filed a motion in
Jefferson Circuit Court seeking to compel a closing of the
settlement agreement and sales contract.
The motion went before
the commissioner for a recommendation to the circuit court.
Upon considering the matter, the commissioner concluded
that the Buyers had breached the sales agreement by failing to
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close, but that the breach was waived by an October 17, 1996
letter from Collins to the Buyers.
The matter then moved to the
circuit court, which agreed with the commission that the sales
contract had been breached, but opined that the breach had not
been waived.
An order to that effect was entered on January 9,
1998.
The Buyers then filed a motion seeking reconsideration.
Attached to the motion was the affidavit of Buyers' counsel, and
a second affidavit of Collins which contradicted his affidavit
tendered with the motion to revive.
Collins' second affidavit
stated in relevant part that he believed the Buyers had not
breached the sales contract.
Specifically, Collins stated that
the delay in closing was a result of 1) James' bankruptcy, 2) the
Buyers' need to arrange financing, and 3) the April 10, 1996
death of one of the Sellers, namely Margaret Binford, which
raised additional issues of law.
Collins would later state that
he had not examined the first affidavit before signing it, and
would not have signed it had he read it.
In response to the motion to reconsider, the Sellers
also tendered an affidavit of real estate agent, William H.
Simpson ("Simpson").
Simpson stated therein that Collins advised
him in early 1996 that the settlement was no longer viable and
that the property could be sold to another buyer.
The circuit court found Collins' second affidavit
pursuasive.
On March 18, 1998, it rendered an order finding that
Collins, as the Sellers' agent, had no intention of voiding the
sales contract and had sent the series of threatening letters
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merely to attempt to bring about a closing.
The court found that
the Buyers had not breached the contract, and granted their
motion to compel a closing.
The Sellers' subsequent motion to
amend, alter or vacate was denied, and this appeal followed.
The primary issue for our consideration is whether the
circuit court committed reversible error in granting the Buyer's
motion to compel a closing.
Specifically, the Sellers maintain
that the Buyers did not attempt to close the real estate contract
in a reasonable period of it, and in so doing breached the
agreement.
They also argue that the order compelling the sale
should be set aside since it is based on repudiated testimony.
Lastly, they argue that the circuit court erred in rendering what
amounts to a summary judgment because the evidence is conflicting
as to whether the Buyers acted in a timely fashion to bring about
a closing.
In sum, the Sellers seek reversal of the order
compelling a sale and reinstatement of the January 9, 1998 order
denying the motion to compel.
In response, the Buyers first argue that the Sellers
failed to serve in a timely fashion their CR 59.05 motion to
alter, amend or vacate, thus depriving this Court of jurisdiction
to consider their appeal.
They also maintain that the order on
appeal was entered pursuant to a motion to enforce a settlement,
not a motion for summary judgment, and is guided not by Steelvest
but by the discretion of the trial court.
Lastly, they argue
that they did in fact attempt a closing in a reasonable period of
time in light of the title defects and delays brought about by
the Sellers.
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We have closely studied the record, the law, and the
arguments of counsel, and must conclude that the record does not
adequately reveal the essential underlying facts necessary for
the full appellate review to which the parties are entitled.
The
dispositive question, as we see it, is whether the Buyers'
alleged failure to close in a timely manner constituted a breach
of the settlement agreement or, conversely, whether the delay in
closing was necessary and justified in light of the bankruptcy
proceeding, title problems, or other legitimate roadblocks to the
closing.
The record, in its present form, is not sufficient for
determining whether the circuit court acted properly in resolving
this question in favor of the Buyers.
In attempting to address this question, we are
presented only with the following:
1) assertions of fact
presented in the briefs but not supported by the record;
2) two
volumes of pleadings and supportive material, and 3) Collins'
letters and affidavits, some of which are contained only in the
briefs.
As the Sellers note, no depositions were taken and no
trial or other fact-finding action was conducted.
Though
hearings were conducted, they addressed motions which were
secondary to the issue at bar.
The question of whether the court properly found that
no breach occurred can be answered only by examining the actions
of the party accused of the breach.
See generally, Bennett v.
Stephens, Ky. 293 S.W.2d 879 (1956).
We know little of that
conduct save what the parties assert in their briefs, and as such
we cannot determine whether the circuit court reached the correct
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result.
The order on appeal does not address the Buyers'
conduct, instead relying only on Collins' affidavit which
concluded that the conduct constituted a breach.
Collins'
opinion, though perhaps relevant, is not dispositive of the
Sellers' assertion that the Buyers failed to perform in a timely
manner.
We need not address the question of whether the order
on appeal should be characterized as a summary judgment, or, as
the Buyers argue, should be guided only by the sound discretion
of the trial court.
The record is insufficient for appellate
review irrespective of how the order on appeal is characterized.
As for the Buyers' contention that the Sellers failed
to serve in a timely fashion their CR 59.05 motion to alter,
amend or vacate, thus depriving this Court of jurisdiction to
consider their appeal, we find no error.
Service was
accomplished on or before March 27, 1998, which is within the
window of opportunity provided for under CR 59.05.
Lastly, the Buyers argue that all necessary parties to
the appeal are not before the Court.
They note that Margaret
Binford ("Binford") died in 1996 during the pendency of the
circuit court proceeding, and argue that the Buyers have
improperly failed to revive her interest in the name of her
estate.
The Buyers maintain that rather than substitute the
estate as a party, the Sellers merely began adding to the
pleadings the names of Binford's children and her executrix, Ann
M. McKaig ("McKaig").
The Buyers argue that the appeal must be
dismissed since all necessary parties are not before the court.
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CR 25.01(1) provides that:
If a party dies during the pendency of
an action and the claim is not thereby
extinguished, the court, within the period
allowed by law, may order substitution of the
proper parties. If substitution is not so
made the action may be dismissed as to the
deceased party. The motion for substitution
may be made by the successors or
representatives of the deceased party or by
any party, and, together with the notice of
hearing, shall be served on the parties as
provided in Rule 5, and upon persons not
parties as provided in Rule 4 for the service
of summons.
The "period allowed by law" to which CR 25.01(1) directs us is
set forth in KRS 395.278.
It states that, "[A]n application to
revive an action in the name of the representative or successor
of a plaintiff, or against the representative or successor of a
defendant, shall be made within one (1) year after the death of a
deceased party."
The Kentucky Supreme Court has held that the one-year
period set forth in KRS 395.278 operates as a statute of
limitations and therefore is " . . . mandatory and not subject to
enlargement."
(1994).
Hammons v. Tremco, Inc., Ky., 887 S.W.2d 336
The Court stated in Hammons at p. 338 as follows:
If a motion to revive the action and to
substitute the successor or personal
representative of the deceased party is not
made within the prescribed time, the action
may be dismissed as to the deceased party. CR
25.01(1). The word "may," as it appears in CR
25.01(1) does not allow for discretionary
dismissal but provides for an exception in
those instances in which the right to have
the action dismissed has been lost, such as
by waiver, estoppel, or consent. Snyder v.
Snyder, Ky. App., 769 S.W.2d 70 (1989).
Therefore, when considered together, KRS
395.278 and CR 25.01(1) require that when a
plaintiff dies any action pending on the part
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of the deceased plaintiff must be revived by
the decedent's successor or personal
representative within one year, and the
successor or personal representative must be
substituted as the real party in interest.
Although an opposing party may, by its
action, lose the right to require the timely
revival of an action, a party cannot, by such
action, confer personal jurisdiction over a
successor or personal representative who has
not appeared or been substituted as a party.
Mitchell v. Money, supra. Likewise,
jurisdiction could not be conferred over
dependents who had not asserted their rights
to survivors' benefits and moved to be
substituted as parties to the action.
It is uncontroverted that the Buyers did not revive
Binford's interest in the name of the executrix.
On remand, we
direct the circuit court to address this failure in light of the
above-cited authority.
For the foregoing reasons, we reverse the order of the
Jefferson Circuit Court and remand the matter for further
findings of fact consistent with this opinion, and for an
examination of the Buyers' failure to revive Binford's interest.
ALL CONCUR.
BRIEF FOR APPELLANTS:
BRIEF FOR APPELLEES, STANLEY
AND LINDA HORNBECK:
Henry Schildknecht
Louisville, KY
Michael L. Maple
Louisville, KY
No brief filed by Appellee,
Robert C. Furr
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