Is a joint tenancy with the right of survivorship severed when one joint tenant executes a quitclaim deed transferring her interest to herself?
Grant v. Grant, 2023 WL 8618896 (Pa. Super.) (unreported), allocatur granted July 9, 2024, appeal docket 18 WAP 2024
In this case, the Pennsylvania Supreme Court will consider whether a joint tenancy with the right of survivorship is severed when one joint tenant executes a quitclaim deed transferring her interest to herself.
In 1996, the decedent, Ms. Grant, and her son, Mr. Grant (the appellee), acquired property as joint tenants with the right of survivorship. In 2020, Ms. Grant filed a partition action seeking to divide the property. Superior Court summarized the procedural and factual background as follows:
On February 27, 2020, the decedent filed a complaint for partition of real property. Therein, the decedent alleged that she and Appellee, who is the decedent’s son, held title as joint tenants with the right of survivorship to real property located in Murrysville, Pennsylvania (“the property”). She noted there were no mortgages, judgments, or liens encumbering the property, and the residential property did not generate rents, profits, or revenues. The decedent averred that holding joint tenancy with Appellee was no longer tenable, and, therefore, she requested the trial court partition the property.
On June 1, 2020, Appellee filed an answer with new matter and counterclaims. Therein, Appellee averred the decedent acquired her interest in the property by way of fraud, accident, or mistake, and, therefore, she was not a valid and lawful title holder to the property in any respect. Appellee presented three counterclaims: count 1-constructive trust, count 2-unjust enrichment, and count 3-declaratory judgment for adverse possession.
On June 18, 2020, the decedent filed a reply to Appellee’s answer with new matter. Also, on this same date, the decedent filed preliminary objections to Appellee’s counterclaims. Specifically, the decedent averred Appellee failed to plead his counterclaims with sufficient specificity.
On August 21, 2020, Appellee filed an amended counterclaim petition wherein he continued to raise three counterclaims: count 1-constructive trust, count 2-unjust enrichment, and count 3-declaratory judgment for adverse possession. In support of his amended counterclaims, Appellee averred that, during Appellee’s entire lifetime, until January of 2020, the decedent had handled Appellee’s bookkeeping and administrative matters, and the decedent had placed herself in a confidential relationship, thus owing a fiduciary duty to Appellee. He indicated he had placed an unfettered trust in the decedent until January 10, 2020, at which time he discovered the decedent had engaged in wasteful, deceptive practices concerning Appellee’s financial resources, which was a breach of the decedent’s fiduciary duty to Appellee.
Appellee averred he purchased the property pursuant to an agreement of sale between him, as the buyer, and Laos Kaldi and Clara Kaldi,1 as the sellers. The decedent was not a party to the agreement of sale; however, on behalf of Appellee, she handled the transaction regarding the property. Appellee averred that, prior to the decedent filing her complaint for partition, he was unaware that a deed dated December 19, 1996, and recorded on December 24, 1996, initially conveyed the property from Laos Kaldi and Clara Kaldi to solely the decedent. Thereafter, by deed dated December 19, 1996, and recorded on January 3, 1997, for reasons unknown to Appellee, the decedent conveyed the property from herself (grantor) to herself and Appellee as joint tenants with the right of survivorship (grantees).
Appellee indicated that, prior to his acquisition of the property, he had been involved in a divorce proceeding. He alleged the decedent, “using her motherly powers of persuasion and taking advantage of [Appellee’s] trust … fraudulently or accidentally or mistakenly convinced [Appellee] that it would be best for [Appellee] and [the decedent] to own the property together to avoid any problems with future girlfriends or spouses of [Appellee].” Appellee’s amended counterclaim, 8/21/20, at ¶ 52. Appellee averred the decedent never personally paid for any loans, mortgages, taxes, maintenance, utility bills, or improvements to the property. Further, Appellee averred the decedent never resided or stayed overnight at the property.
Appellee averred that, on January 10, 2020, he was summoned to the decedent’s house for a meeting concerning the decedent’s handling of the Grant family’s financial affairs (“the January meeting”). Upon his arrival, he was met by the decedent, her attorney, and her accountant. During the January meeting, Appellee discovered the decedent had squandered and misappropriated Appellee’s financial resources, as well as the family fortune, over which the decedent had control.
Accordingly, in count 1 of his amended counterclaim, Appellee requested the trial court place the property in a constructive trust solely for the benefit of Appellee and to prevent the unjust enrichment of the decedent. In count 2 of his amended counterclaim, Appellee indicated that, from September of 2008 to August of 2010, he made improvements to the property totaling $1,155,282.33, and from January of 2010 to October of 2010, he made improvements to the property totaling $486,185.69. He noted the decedent did not pay for any of these improvements with her own funds. Thus, Appellee averred that, in the event the trial court ordered partition of the property, he must be given credit, and the decedent must account for all sums expended by Appellee, so that the decedent would not be unjustly enriched. In count 3 of his counterclaim, Appellee requested a declaratory judgment that, to the extent the decedent had any interest in the property, Appellee had acquired sole ownership via adverse possession due to his open, exclusive, and continuous possession for over 21 years.
Slip op. at 1-5. In November 2021, when the partition action was still pending. Ms. Grant executed a quitclaim deed transferring her interest in the property from herself to herself. Ms. Grant passed away on May 14, 2022, before the partition action was resolved. Subsequently, the executrix of Ms. Grant’s estate attempted to continue the partition action and filed preliminary objections, asserting that the joint tenancy had been severed, converting the ownership into a tenancy in common such that Ms. Grant’s interest in the property became part of her estate upon her death. Mr. Grant countered that the quitclaim deed did not sever the joint tenancy because it was a self-conveyance that did not destroy any of the four unities – interest, title, time, and possession – essential to a joint tenancy, therefore, upon Ms. Grant’s death, her interest automatically transferred to Mr. Grant as the surviving joint tenant. The trial court overruled the executrix’s preliminary objections, reasoning as summarized by Superior Court:
As it related to the partition action, relying on Sheridan v. Lucey, 395 Pa. 306, 149 A2d 444, 446 (1959), the trial court noted that “the mere pendency of an action in partition, without more, is insufficient to work a severance of the joint tenancy, whereupon an abatement occurs upon the death of the joint tenant.” Trial Court Order, filed 10/14/22 (citation omitted). Accordingly, the trial court concluded that the decedent’s death on May 14, 2022, during the pendency of the partition action, “invoked a divestiture of [her] interest in favor of the survivor, [Appellee].” Id. Consequently, the trial court reasoned that, since the decedent’s death legally vested title in the property to the sole survivor (Appellee), the executrix was not entitled to be substituted as the plaintiff in the partition action. See id.
Furthermore, while the trial court recognized there was evidence that the decedent executed a Quitclaim Deed on November 1, 2021, prior to her death and during the pendency of the partition action, the trial court deemed the Quitclaim Deed inapplicable to the partition action. In this vein, the trial court noted that “the Quitclaim Deed was not brought to issue in the partition action until after [the decedent’s] death and the Suggestion of Death was filed on May 25, 2022, which is after the partition action should have abated.” Id. However, the trial court determined the Quitclaim Deed was relevant to Appellee’s counterclaim to quiet title, and thus, the trial “court’s ruling that the Partition Action abates does not prevent either party from obtaining relief” in a quiet title action. Id.
Slip op. at 7-8. Mr. Grant filed a motion for judgment on the pleadings requesting the trial court grant his counterclaim to quiet title. The trial court determined that the 2021 Quitclaim Deed did not sever the joint tenancy and granted Mr. Grant’s motion for judgment on the pleadings, reasoning as quoted by Superior Court:
[The trial] court ruled, in reliance on Sheridan, [supra], that the partition action abated upon [the decedent’s] death on May 14, 2022. Based on that abatement, her joint interest in the property terminated upon her death and by operation of law reverted to [Appellee] as the joint tenant holding the right of survivorship …. [The trial] court did not err or abuse its discretion in finding that the November 1, 2021, Quitclaim Deed did not sever the joint tenancy between [the decedent] and [Appellee]. The [trial] court applied the standard set forth in Sheridan, [supra]: “Although a voluntary act on the part of one of the joint tenants is adequate to work a severance, that act must be of sufficient manifestation that the actor is unable to retreat from her position of creating a severance of the joint tenancy.” Id. at 446. [The trial] court found the application of this principle by the Superior Court in Wolf v. Nearing, 272 A.3d 493, [438 WDA 2021] (Pa. Super. 2021) [(unpublished memorandum)] persuasive. As in the Wolf case, the quitclaim deed at issue here did not divest [the decedent’s] interest in the property and she retained her undivided one-half interest in the property. “A joint tenancy is severed when one or more of the four unities [interest, title, time, and possession] is destroyed.” The Quitclaim Deed conveying [the decedent’s] interest in the property to herself did not destroy any of the four unities, as she retained her interest in the property, and retreat from said action was possible. The application of his law supports the finding that the joint tenancy remained intact at the time of [the decedent’s] death, [the decedent and Appellee] did not hold the property as tenants in common, and, therefore, title passed fully to [Appellee] and not to [Appellee] and [the decedent’s] estate in equal shares.
The [trial] court [concludes] this [holding does not] violate the presumption against joint tenancies with the right of survivorship and is [not] tantamount to a [nonpermissive] restraint on alienation with respect to property. A joint tenancy with the right of survivorship already existed prior to the [trial] court’s ruling pursuant to the terms of the December 19, 1996, deed, and there is no statute that prevents “the creation of the right of survivorship by the express words of a will or deed ….” Maxwell v. Saylor, 359 Pa. 94, 58 A.2d 355, 356 (1978). The only decision the [trial] court made was whether, once created, the joint tenancy was properly severed. The case law cited above is clear on how the court is to analyze acts purported to sever a joint tenancy, and the [trial] court applied the law to the facts of this case in reaching its decision.
Slip op. at 15-17, quoting trial ct. op. at 4-5. The executrix appealed to Superior Court, arguing that the trial court erred in relying on Wolf to find the 2021 Quitclaim Deed did not sever the joint tenancy because Wolf is an unpublished memorandum and is not consistent with the holdings of other states.
Superior Court affirmed the trial court’s decision, holding that the quitclaim deed did not sever the joint tenancy. The court reasoned that Ms. Grant’s self-conveyance did not disrupt the four unities required for a joint tenancy, therefore upon her death, her interest in the property passed to Mr. Grant by right of survivorship, concluding that:
Initially, we agree with the trial court that this Court’s decision in Wolf is persuasive. In Wolf, supra, on January 2, 2001, parents conveyed property to their two daughters, Wolf and Coy, as joint tenants with the right of survivorship. Thereafter, Wolf married Charles, and on May 22, 2020, Wolf executed a deed conveying her one-half interest in the property to herself and Charles as tenants in common.
On July 13, 2020, Wolf and Charles filed a complaint for partition claiming that the May 22, 2020, deed severed the joint tenancy of Wolf and Coy, thus resulting in Coy, Wolf, and Charles holding title as tenants in common. Coy countered that Wolf conveyed the property to herself and Charles because Wolf was diagnosed with a terminal illness. The trial court found the May 22, 2020, deed did not sever the joint tenancy created by the January 2, 2001, deed. A panel of this Court affirmed holding:
As the trial court explained, Wolf did not convey her interest just to a third party, but rather conveyed that interest to herself and her husband. Thus, [t]he retention of an interest in the subject property by [ ] Wolf militates against severance of the survivorship tenancy. We agree.
Our review confirms the conveyance effected by the May 22, 2020, deed was not “of sufficient manifestation that the actor is unable to retreat from [her] position of creating a severance of the joint tenancy.” Sheridan, [supra], 149 A.2d at 446. Specifically, the May 22, 2020, deed resulted in no divestiture of Wolf’s interest in the … property. Under the May 22, 2020, deed, Wolf retained her undivided one-half interest in the … property, although purportedly as a tenant in common with Charles. Consequently, the May 22, 2020, deed failed to extinguish Wolf and Coy’s joint tenancy.
Wolf, 272 A.3d 493, 438 WDA 2021, at *3.
Similar to Wolf, the Quitclaim Deed in the instant matter, whereby the decedent purported to convey the property from herself to herself, militates against severance of the joint tenancy. Simply put, the decedent did not convey her interest to a third party. General Credit Co. [v. Cleck, 609 A.2d 553, 556 (Pa. Super. 1992)].
We agree with the trial court that the decedent’s Quitclaim Deed of self-conveyance, from herself to herself, is not sufficient to sever the four unities of joint tenancy. As in Wolf, the act was not of sufficient manifestation that the actor was unable to retreat from the position of creating a severance of the joint tenancy. Accordingly, the trial court did not err in quieting title in Appellee’s favor based on the pleadings. See Consolidation Coal Co.[v. White, 875 A.2d 318 (Pa. Super. 2005)].
Slip op. at 17-19.
The Pennsylvania Supreme Court will consider the following issues, as stated by the executrix:
- Did the Superior Court err in holding that the quitclaim deed that is the subject of the instant action was insufficient manifestation of [decedent’s] intent to sever the joint tenancy with [respondent] from which she could not retreat because that finding conflicts with other intermediate appellate court opinions and determinations of this Court?
- Did the Superior Court err in concluding that there was no severance of the joint tenancy because [decedent] did not convey the [subject property] to a third party because that holding conflicts with prior determinations of this Court?