Opinion
NO. 2018-CA-000421-MR
11-15-2019
CHARLES HARDIN JR.; MACHELLE HARDIN; DONALD HARDIN; SHANNON HARDIN; RANDALL HARDIN; AND TAMMY HARDIN APPELLANTS v. BRENDA HARDIN BREWER; RICHARD BREWER; GARY HARDIN; AND BRENDA HARDIN APPELLEES
BRIEF FOR APPELLANTS: David J. Porter Paintsville, Kentucky NO BRIEF FOR APPELLEES.
NOT TO BE PUBLISHED APPEAL FROM BREATHITT CIRCUIT COURT
HONORABLE FRANK ALLEN FLETCHER, JUDGE
ACTION NO. 16-CI-00087 OPINION
AFFIRMING
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BEFORE: LAMBERT, MAZE, AND TAYLOR, JUDGES. TAYLOR, JUDGE: Charles Hardin Jr., Machelle Hardin, Donald Hardin, Shannon Hardin, Randall Hardin, and Tammy Hardin (collectively referred to as appellants) bring this appeal from a March 9, 2018, order of the Breathitt Circuit Court directing certain tracts of real property to be sold by the master commissioner pursuant to a partition action. We affirm.
On May 16, 2016, Charles Hardin Jr. and Machelle Hardin filed a complaint against Brenda Hardin Brewer, Richard Brewer, Randall Hardin, Tammy Hardin, Donald Hardin, Shannon Hardin, Gary Hardin, and Brenda Hardin. Therein, it was alleged:
1) This is a Partition Action with the property at issue being of record in Deed Book 209, Page 505; Deed Book 165, Page 318 (mineral interest); Deed Book 131, Page 51; Deed Book 111, Page 238; and Deed Book 136, Page 716, all of record in the office of the Breathitt County Clerk.
. . . .
3) Plaintiff, Charles Hardin Jr., is a residual devisee of Charles Hardin Sr. and thereby inherited a one-fifth (1/5) undivided interest in the properties referenced above in Paragraph 1. The Will of Charles Hardin Sr. is of record in WB 19, Page 611, records of the Breathitt County Court Clerk.
4) Plaintiff, Machelle Hardin, was made a Plaintiff in this action by virtue of her being the spouse of Plaintiff, Charles Hardin Jr., and having thereby a dower interest.
5) Defendant, Brenda Hardin Brewer, is a residual devisee of Charles Hardin Sr. and thereby inherited a one-fifth (1/5) undivided interest in the properties referenced above in Paragraph 1.
6) Defendant, Richard Brewer, is made a Defendant in this matter by virtue of his being the spouse
of Defendant, Brenda Hardin Brewer, and having thereby a dower interest.May 16, 2016, Verified Complaint at 2-4. Charles and Machelle sought to have a total of five tracts of real property sold by the master commissioner.
7) Defendant, Randall Hardin, is a residual devisee of Charles Hardin Sr. and thereby inherited a one-fifth (1/5) undivided interest in the properties referenced above in Paragraph 1.
8) Defendant, Tammy Hardin, is made a Defendant in this matter by virtue of her being the spouse of Defendant, Randall Hardin.
9) Defendant, Donald Hardin, is a residual devisee of Charles Hardin Sr. and thereby inherited a one-fifth (1/5) undivided interest in the properties referenced above in Paragraph 1.
10) Defendant, Shannon Hardin, is made a Defendant in this matter by virtue of her being the spouse of Defendant, Donald Hardin, and having thereby a dower interest. thereby a dower interest [sic].
11) Defendant, Gary Hardin, is a residual devisee of Charles Hardin Sr. and thereby inherited a one-fifth (1/5) undivided interest in the properties referenced above in Paragraph 1.
12) Defendant, Brenda Hardin, is made a Defendant in this matter by virtue of her being the spouse of Defendant, Gary Hardin, and having thereby a dower interest.
13) The real properties and mineral interest therein set forth in Paragraph 1 of this Complaint cannot be divided without substantially impairing their values.
On July 28, 2016, Charles and Machelle filed a Motion for Default Judgment and Order of Sale. They stated that defendants were served or filed a waiver of process and that no answers were filed by defendants. By Default Judgment and Order of Sale entered August 5, 2016, and Amended Default Judgment and Order of Sale entered August 10, 2016, the court rendered a default judgment and ordered the five tracts of real property sold by the master commissioner.
The circuit court ordered that "[i]n the event the sale price of the whole is larger than the sum of the individual sales, the purchaser shall be the highest bidder on the whole." August 10, 2016, Amended Default Judgment and Order of Sale at 6.
A Report of Sale was filed on September 27, 2016. The master commissioner reported that the five parcels were sold as a whole, and the highest bidder was Donald Hardin for $225,000. Shortly thereafter, on October 5, 2016, Mable Epperson and Timothy Epperson filed exceptions to the master commissioner's sale. The Eppersons claimed:
Neither Mable Epperson nor Timothy Epperson were parties in the underlying action. --------
1. The Verified Complaint in this matter sought to partition the mineral interest that was apparently thought to be owned by the parties by inheritance from Charles Hardin, and being property in which Charles Hardin was conveyed an interest by Deed of record in Deed Book 165 Page 318. This property was listed (without designation as a mineral interest only) as follows in the Notice of Sale:
"[sic]A certain tract or parcel of land lying and being in Breathitt County, Kentucky, on the Bear Hollow of Nixes Branch of Troublesome Creek. Property recorded in Deed Book 156 Page 318, records of Breathitt County Clerk's Office.
2. The subject Deed, Deed Book 165 Page 318, was a Mineral Deed in which Charles Hardin, predecessor in title of the parties, was conveyed a 1/5 mineral interest to the property described therein, as a JOINT TENANT WITH RIGHTS of SURVIVORSHIP, along with his four other siblings: Mable Epperson, W.H. Hardin, Betty Lou Campbell, and Annetta Hardin. Given the legal status of joint tenants with survivorship, and by operation of law, Charles Hardin's 1/5 interest in the mineral of the property vested in the remaining Grantees of said Deed upon his death. As such, the parties in this action did not own any interest in the designated Tract II, to be partitioned in this proceeding.
3. Though the facts stated in paragraph 2 make the following issued [sic] possibly not necessary, it is also of note that Deed Book 165 Page 318 did contain a Right of First Refusal and Option to Purchase the interest of each of the other Grantees in the event of sale, which, if the parties would have had an interest to sell, was not complied with. Mable Epperson is vested with said Right of First Refusal and Option, and states that same was not complied with, and she, or the other holders, were not made a party to this action for same to be addressed.
4. Mable Epperson and Timothy Epperson are the owners of the surface of the property designated as Tract II, pursuant to devise in Item III (f) of the Last Will and Testament of Thurman Hardin and Cora Hardin of record in Will Book 5 Page 19, of the Breathitt County Clerk. The Eppersons were concerned that their surface interest could have been affected by this action, and if, for some
reason, the sale of the mineral were to proceed, they would like clarification that their surface interest has not been affected in any way.October 5, 2016, Verified Exceptions 1-2.
By order entered October 28, 2016, the circuit court concluded that neither plaintiffs nor defendants possessed any ownership interest in the mineral estate of Tract 2 contrary to appellants' assertion and that Tract 2 was erroneously included in the sale conducted by the master commissioner. The master commissioner then filed a Report and Motion For Costs and Order Confirming Sale, Approving Deed, and For Distribution on October 31, 2016. The master commissioner sought to confirm the sale of all tracts (including Tract 2) to Donald Hardin. The court denied the master commissioner's motions and ordered the remaining tracts to be "re-sold" by the master commissioner by order entered November 4, 2016.
Thereafter, Charles Hardin and Donald Hardin filed a Motion to Purchase Properties. They pointed out that Tract 4 was the subject of a separate partition action (No. 16-CI-00206) in Breathitt Circuit Court. November 16, 2016, Motion to Purchase at 2. However, Charles and Donald asserted that Charles was the highest bidder at the master commissioner's sale of Tract 1 for $75,000 and Tract 3 for $25,000; Donald was the highest bidder of Tract 5 for $75,000. Charles and Donald maintained that "DONALD HARDIN, with the consent of [Charles] given herein should be permitted to purchase" Tract 1, Tract 3, and Tract 5 for the highest bid amounts. Motion to Purchase at 2.
By order entered March 28, 2017, the circuit court granted the motion to allow Donald to purchase Tract 1 for $75,000, Tract 3 for $25,000, and Tract 5 for $75,000. Brenda Hardin Brewer and Richard Brewer then filed a motion to reconsider. They alleged that neither Donald nor Charles were the highest bidder for Tract 5; rather, Rebel Combs was the highest bidder. The master commissioner also filed a motion to alter, amend, or vacate and claimed that the highest bidder for Tract 5 was Combs in the amount of $75,000.
By order entered May 8, 2017, the circuit court decided that the three tracts of real property should be sold again by the master commissioner. Appellants then filed a motion to alter, amend, or vacate the May 8, 2017, order. Therein, appellants argued that Donald should be permitted to purchase Tracts 1 and 3 for the highest bid amount, as there was no controversy as to these tracts. Appellants stated that the parties should submit evidence as to who the highest bidder was for Tract 5. Appellants asserted that the highest bidder for Tract 5 was not Combs but was Donald with a bid of $75,000.
In a February 20, 2018, order, the circuit court set aside its May 8, 2017, order. The court decided that Donald could purchase Tracts 1, 3, and 5 for the highest bid amounts and directed the master commissioner to prepare deeds of conveyance. Brenda Hardin Brewer, Richard Brewer, Gary Hardin, and Brenda Hardin (collectively referred to as appellees) timely filed a motion to reconsider the February 20, 2018, order. Appellees argued:
When the property was exposed for sale, there were tracts included which were not owned by the parties hereto. There was confusion as to which property was contained within the individual tracts. Due to this confusion there is great uncertainty as to whether any of the bidders knew precisely which property they were bidding on. These parties believe that had all of the bidders known precisely what they were attempting to buy, the bidding would have been much different.March 2, 2018, Motion to Reconsider at 1. In response, appellants conceded that confusion existed as to Tracts 2 and 4 but asserted that there was no confusion as to Tracts 1, 3, and 5.
By a March 9, 2018, order, the circuit court granted appellees' motion to reconsider and once again ordered Tracts 1, 3, and 5 to be sold by the master commissioner. This appeal follows.
Before addressing the merits of the appeal, we note that appellees have not filed an appellee brief in this appeal. Kentucky Rules of Civil Procedure (CR) 76.12(8)(c) "provides the range of penalties that may be levied against an appellee for failing to file a timely brief." St. Joseph Catholic Orphan Soc'y v. Edwards, 449 S.W.3d 727, 732 (Ky. 2014). This Court may "(i) accept the appellant's statement of the facts and issues as correct; (ii) reverse the judgment if appellant's brief reasonably appears to sustain such action; or (iii) regard the appellee's failure as a confession of error and reverse the judgment without considering the merits of the case." CR 76.12(8)(c); St. Joseph Catholic Orphan Soc'y, 449 S.W.3d at 732. For purposes of this appeal, we accept appellants' statement of facts set forth in their brief as correct, of course subject to our independent review of the entire record on appeal.
Appellants' primary argument in this appeal is that the circuit court abused its discretion by ordering a new sale of Tracts 1, 3, and 5 by the master commissioner. Appellants believe that Donald should be allowed to purchase said tracts for the highest bid amounts obtained at the first master commissioner's sale. Appellants also argue that the March 9, 2018, order was a calendar order and that the court made no findings of fact to support its ruling. Appellants point out that the court's previous orders of March 28, 2017, and February 20, 2018, were supported by findings of fact and permitted Donald to purchase Tract 1 for $75,000, Tract 3 for $25,000 and Tract 5 for $75,000, representing the highest bids. Appellants maintain that the March 28, 2017, and February 20, 2018, orders "brought about final disposition under the circumstances of the case in a reasonable and fair method based upon findings of sound legal principles." Appellants' Brief at 11.
As noted, Paragraph 1 of the complaint states that this case is a "Partition Action." Historically in Kentucky, partition is an equitable action that looked to the actual division of real property among two or more joint owners. See 68 C.J.S. Partition § 1, et seq. (2019); Hisle v. Lexington-Fayette Urban Cty. Gov't, 258 S.W.3d 422 (Ky. App. 2008). There are three statutes in Kentucky that look to the division of land by partition. They are Kentucky Revised Statutes (KRS) 381.120, KRS 381.135 and KRS 381.136. These statutes supplement the traditional jurisdiction of equity courts to grant division by partition. Atkinson v. Kish, 420 S.W.2d 104 (Ky. 1967).
In this case, there are five separate tracts of land referenced in the complaint. However, the complaint seeks to sell the land and divide the proceeds among the five owners, and not divide the property. In 1980, KRS 389A.030 was enacted, superseding the former KRS 389.020 that addressed modern day partition actions where a joint owner seeks the sale of jointly owned real property, rather than division. Under this statute, the indivisibility of the real estate at issue is presumed by law, subject to rebuttal. KRS 389A.030(3). If divisibility is established, then the property is ordered to be divided in accordance with KRS 381.135. Based on the complaint and record in this case, this is an action by joint owners to sell real property in accordance with KRS 389A.030(1) and (4). Thus, we believe this is the controlling law of the case.
KRS 389A.030 states:
(1) When two (2) or more persons other than tenants by the entirety in residential property actually occupied by them as a principal residence share title to real estate in such manner that a conveyance by them jointly would pass a fee simple title, any one (1) or more of them may bring an action for the sale or division thereof in the Circuit Court of the county in which the land, or the greater part thereof, lies, making parties defendant those owners who have not joined as plaintiffs. A fiduciary possessing a power of sale may institute such an action against owners of interests not represented by him. Defendant owners shall be brought before the court in the manner provided by the civil rules whether or not a fiduciary possesses a power of sale of the defendant's interest, but any fiduciary possessing such a power shall also be made a defendant. The case shall be tried without a jury.
(2) A defendant who is under disability and for whom no fiduciary is acting shall be represented in the action by a guardian ad litem, but in the event of sale of such defendant's interest the court shall retain control of the proceeds of such interest until a duly appointed and adequately bonded fiduciary or custodian pursuant to a court order makes claim to the funds.
(3) In all such actions indivisibility of the real estate shall be presumed unless an issue in respect thereto is raised by the pleading of any party, and if the court is satisfied from the evidence that the property is divisible, without materially impairing the value of any interest therein, division thereof pursuant to KRS 381.135 shall be ordered.
(4) If a sale of all or any part of the real estate shall be ordered, the court shall refer the matter to the master commissioner or appoint a commissioner to conduct a
public sale and convey the property upon terms of sale and disposition of the net proceeds as may have been determined by the court.
In addressing the issues raised below by both parties due to the irregularities surrounding the court ordered sale, the circuit court changed its decision four times from November 4, 2016, to March 9, 2018, ultimately deciding to order a new sale of Tracts 1, 3, and 5. While procedurally this was certainly unusual, all of the court's rulings were effectively in response to what we consider were CR 59.05 motions filed by both parties. As a general rule, a circuit court's decision to grant or deny a CR 59.05 motion to alter, amend, or vacate a judgment looks to the sound discretion of the circuit court. Emberton v. GMRI, Inc., 299 S.W.3d 565 (Ky. 2009). An abuse of discretion occurs when the trial judge's "decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Miller v. Eldridge, 146 S.W.3d 909, 914 (Ky. 2004) (quoting Goodyear Tire & Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000)). This is the standard of review we will apply to the March 9, 2018, order now on appeal.
In this case, the circuit court originally ordered the sale of five tracts of real property pursuant to the complaint seeking the sale thereof. The sale of the five tracts by the master commissioner was set aside by the court because neither appellants nor appellees possessed an ownership interest in the mineral estate or surface estate of Tract 2. Also, Tract 4 was the subject of another partition action. So, the circuit court ordered Tracts 1, 3, and 5 to be sold again by the master commissioner. In so doing, for the reasoning that follows, we do not believe the circuit court abused its discretion.
As noted, in a partition action under KRS 389A.030, the circuit court may order the physical division of the real property pursuant to KRS 381.135, or order the real property to be sold by the master commissioner and divide the proceeds therefrom among the owners. McKinney v. McKinney, 888 S.W.2d 332, 333 (Ky. App. 1994). However, a private agreement to establish the sale price among some of the property owners is certainly not within the purview of a statutory partition action set forth in KRS 389A.030. This was the end result of the orders entered March 28, 2017, and February 20, 2018, upon which appellants rely. However, we find no case law or statutory authority to support such a ruling. The appellees argued to the circuit court below that there was some confusion at the first master commissioner's sale as to the status of Tracts 2 and 4, which appellants have acknowledged. The circuit court recognized this confusion and the court's earlier errors by ordering a new sale on March 9, 2018. Additionally, as concerns the alleged failure of the circuit court to make findings of fact in its March 9, 2018, order, we note that this issue was not timely brought to the court's attention by appellants pursuant to CR 52.04. Accordingly, we will not address this on appeal, although we are not aware of any rule requiring a court to make findings of fact on a CR 59.05 motion.
We find it neither arbitrary nor unfair for the circuit court to conclude that the confusion regarding the first sale adversely affected the sale price of all the tracts, including Tracts 1, 3 and 5. Thus, we are of the opinion that the circuit court did not abuse its discretion by ordering the master commissioner to conduct a new sale for Tracts 1, 3, and 5.
We view any remaining contentions of error as moot or without merit.
For the foregoing reasons, the order of the Breathitt Circuit Court is affirmed.
ALL CONCUR. BRIEF FOR APPELLANTS: David J. Porter
Paintsville, Kentucky NO BRIEF FOR APPELLEES.