Amanda Lowry v. Nicole M. Irish

CourtCourt of Chancery of Delaware
DecidedSeptember 18, 2020
DocketCA No. 2019-0269-SG
StatusPublished

This text of Amanda Lowry v. Nicole M. Irish (Amanda Lowry v. Nicole M. Irish) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amanda Lowry v. Nicole M. Irish, (Del. Ct. App. 2020).

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

AMANDA LOWRY, ) ) Petitioner, ) ) v. ) C.A. No. 2019-0269-SG ) NICOLE M. IRISH, ROCKLAN L. ) REYNOLDS and RANDAL L. ) REYNOLDS, ) ) Respondents. )

MEMORANDUM OPINION

Date Submitted: June 10, 2020 Date Decided: September 18, 2020

Stephen W. Spence and Stephen A. Spence, of BAIRD MANDALAS BROCKSTEDT, LLC, Lewes, Delaware, Attorneys for Petitioner.

Eugene H. Bayard, R. Eric Hacker, and Ross C. Karsnitz, of MORRIS JAMES LLP, Georgetown, Delaware, Attorneys for Respondents.

GLASSCOCK, Vice Chancellor This matter turns on the ability of co-tenants to waive the statutory—

originally common-law—right to partition an estate in real property. The Petitioner

seeks partition of a tenancy in common, the Respondents interpose a contractual

waiver of the right, and the matter is before me on the Petitioner’s Motion for

Judgement on the Pleadings.

The right to partition is based on the law’s traditional abhorrence for the

restraints on alienation implied by co-tenancy, and by the economic inefficiencies

inherent in requiring unanimity concerning the disposition of any property. The

right to partition real property is said to be absolute—a descriptor that then-Vice

Chancellor Strine termed “iron[ic]” in light of cotenants’ established, if limited,

ability to waive the right. 1 It is better, I think, to view partition as a right inherent in

all real property, jointly owned. In that sense, it is absolute. The co-owners

themselves, however, as free actors, may bind themselves by contract to eschew

exercise of the right. Looked at in that way, controversies over the ability to waive

the “absolute” right of partition are better seen as disputes over the validity of

contractual obligations to refrain from exercise, and whether such obligations may

be specifically enforced. Our case-law indicates that contracts requiring the parties

to eschew exercise of partition are enforceable to the extent they are clear, present

1 Libeau v. Fox, 880 A.2d 1049, 1056 (Del. Ch. 2005), aff’d in pertinent part, 892 A.2d 1068 (Del. 2006). 1 some reasonable mechanism for sale as an alternative to partition, and where the

restriction on partition is reasonable in duration. 2 In such a situation, a petitioner in

partition, having accepted the benefits of the contract in which she waived partition,

is estopped from invoking the right to partition inherent in the co-tenancy.

The instant action involves the Workman farm, roughly 140 acres of farmland

near Milton (the “Property”). The contract (the “Agreement”) was between siblings,

who had then just obtained the Property from their parents by gift and purchase. The

siblings, Willard Workman and Sandra Reynolds, agreed that each “waives any and

all right which he may otherwise have . . . to seek a partition of the Property . . .

without the prior written consent of the other parties.”3 This promise was,

specifically, binding on “third party purchasers,” and the Agreement generally

bound “heirs, personal representatives, successors and assigns” to its terms. 4 The

Agreement was entered for consideration; the contractual sale mechanism (which

involves an appraisal procedure and right of first refusal) was reasonable, and the

Agreement is thus enforceable if the duration of the restriction of partition is

reasonable. That requirement—that a restraint on the partition right is enforceable

only if its duration is reasonably limited—is the crucial issue here.

2 Id. at 1064. 3 Defs.’ Verified Answer, Defenses and Counterclaim (“Answer and Countercl.”), Ex. A, Co- Ownership Agreement (“Agreement”) § 4.01(b), Dkt. No. 19. 4 Id. §§ 4.01(g), 7.11. 2 Restraints on alienation of land are disfavored in law because they restrict the

owners’ ability to put the property to its highest and best use. As this Court has

pointed out, the social interest in highest-value use has diminished over time. 5 In

fact, at the time of the Agreement (and thereafter), Delaware had rejected the

common-law Rule Against Perpetuities for trusts, and the Property could have been

placed in trust, avoiding co-tenancy, for 110 years. 6 Nonetheless, restrictions on the

free use of property continue to be economically inefficient, and the prospect of co-

tenancies entailed forever without the prospect for value-maximizing exits, with the

co-tenants locked together down the generations like scorpions in a bottle, is one the

law will not countenance. Accordingly, waivers by co-tenants of partition rights

must be limited to a reasonable duration, or they are unenforceable.

The need for such limitations is problematic, because, to be effective, a

restraint on partition must apply to assigns, and cannot simply be limited to the

signatory parties themselves. A moment’s reflection reveals that such must be the

case; otherwise, an agreement not to partition could be avoided simply by

transferring the interest to a third party, who—not himself bound—could

immediately seek a partition of the estate. Obviously, then, a provision binding

third-party purchasers—as per the Agreement here—is not itself fatal to the

5 Libeau, 880 A.2d at 1058. 6 See 25 Del. C. § 503(a), (b). 3 enforceability of the waiver. However, a contract to waive partition without

reasonable temporal limitation is unenforceable for the reasons discussed above. It

is with these principles in mind that I address the instant Motion for Judgement on

the Pleadings, by which the Petitioner seeks an Order of Partition of the Property.

In this case, both parties to the Agreement have died. The petitioner is

Amanda Lowry, daughter of Willard Workman. She owns an undivided 50% of the

Property, which she received from Workman by will. Lowry seeks partition of the

Property under the statute,7 which would presumably result in her owning half of the

acreage, solely. She contends she is free of the contractual waiver of partition and

sale procedure provisions of the Agreement, because those provisions are

unenforceable as unreasonable restraints on alienation (or because the Agreement

otherwise runs afoul of the Rule against Perpetuities).

By its terms, the Agreement binds heirs and assigns. It terminates only when

title is merged or where “all interests . . . are sold.” 8 As such, I find, if enforced as

written, the Agreement would be potentially perpetual and work an unreasonable

restraint on alienation. Accordingly, the partition waiver is unenforceable, and the

Petitioner is entitled to a partition. I amplify my reasoning, below.

7 25 Del. C. § 721. 8 Agreement § 1.01. 4 I. BACKGROUND 9

At issue in this Petition is the Property, a nearly 140-acre parcel located just

west of Milton, Delaware, fronting a major public road (Delaware Rt. 16) on the

north and Lavinia Pond on the south. 10 Petitioner Amanda Lowry is a North

Carolina resident who owns an “undivided one-half interest” in the Property.11

Respondents Nicole Irish, Rocklan Reynolds, and Randal Reynolds, collectively,

own the other one-half interest in the Property. 12 Both parties came into their

interests in the Property through inheritance. 13

The Property was originally three separate parcels.14 The parties’

grandparents, Willard H. Workman and Louise E. Workman (the “Grandparents”),

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Bluebook (online)
Amanda Lowry v. Nicole M. Irish, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amanda-lowry-v-nicole-m-irish-delch-2020.