Estate Of Lucille Osborn v. Kemp

991 A.2d 1153 (2010)

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Nature of the Case

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Facts

Lucille and her husband bought the beach house back in 1968. The beach house had two floors which were divided into two separate apartments. In 1984, Lucille decided to rent out the top floor but wanted to keep the bottom floor for herself. D began leasing the upper apartment at a rate of $275 a month, plus utilities. From the start D wanted to buy the beach house and on April 16, 1985, Lucille and d entered into an agreement where Lucille agreed to sell the beach house to D. D drafted the holographic document which provided, in its entirety, 'I, Michael Kemp agree to pay Lucille Menicucci $275.00 per month plus utilities for twenty years for the purchase of property at 292 S. Delaware and Bay Ave. Slaughter Beach for $50,000.' Both parties signed the document. They also got it notarized that very same day. Then notary testified that before she notarized a document, she customarily requested photo identification from the signatories. Lucille left with the original. She later photocopied the document and sent it to D for his records. Lucille remarried and signed an antenuptial agreement with her husband. The antenuptial agreement stated that Lucille owned the property in fee simple without mentioning the contract with D. No dispute arose over any missed payments. With each payment, Lucille and she would send them a copy of the receipt. These receipts refer to the payments only as 'rent.' D made $11,000 in improvements over the years. Lucille listed on a 2004 tax return that the payments made by D were 'rent' and did not indicate D's ownership stake. April 2005 came and passed with little moment and more payments. In July 2005, D sent Osborn a check for past 'rent' for the months of May, June, and July. Kemp claims that he realized his error in August 2005 and stopped making payments. D testified that sometime in August he spoke with Lucille about the deed transfer, but they did not set a firm date for the transfer. Lucille began to suffer from dementia. P soon assumed all of Lucille's affairs and noticed that D had stopped making payments on the beach house. According to P, D apologized profusely and agreed to pay the back rent. D did not mention anything about the contract, nor did D assert any legal ownership interest in the beach house. Eventually, P served a '5-Day Notice' to obtain past due rent and utilities payments. D sent a copy of the copy of the installment contract and asserted that he had a property interest in the beach house. P sued D seeking a permanent injunction, declaratory judgment, and restitution. The Vice Chancellor ordered specific performance. The Vice Chancellor set the terms of specific performance as (1) D must pay P $ 50,000 within 90 days, (2) D must pay interest, compounded quarterly, accruing from April 16, 2005, (2) D must remit to P payment for utilities up until the present time, (3) D must pay for the deed preparation and closing costs, (4) and P would pay the transfer tax. P appealed.