Schott v. Citizens Fidelity Bank & Trust Co.

692 S.W.2d 810
CourtCourt of Appeals of Kentucky
DecidedJune 28, 1985
StatusPublished
Cited by13 cases

This text of 692 S.W.2d 810 (Schott v. Citizens Fidelity Bank & Trust Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schott v. Citizens Fidelity Bank & Trust Co., 692 S.W.2d 810 (Ky. Ct. App. 1985).

Opinion

DUNN, Judge.

These consolidated appeals are from a judgment of the Jefferson Circuit Court distributing the proceeds from a commissioner’s sale of real property in a consolidated case resulting from three separate suits concerning the real property in question.

Appellant, James W. Schott, contends that, as the owner of an undivided one-half interest in the property, he was entitled to one-half of the amount realized from the sale. Appellee/cross-appellant, Cheryl Drexler, on the other hand maintains that Schott’s share of the proceeds should be reduced in proportion to improvements and repairs which she and her former spouse, Vincent Drexler, the owners of the other undivided one-half interest, had made to the property. Cheryl further contends that the trial court erred in overruling her motion to set aside its previous order distributing $8,260.10 of Vincent’s share of the proceeds to appellee, P.A. Vogel Company, his judgment creditor. We affirm.

On January 22, 1971, James Schott and his wife (now deceased) and Cheryl and Vincent Drexler, then husband and wife, purchased as tenants in common the lot and house in question situated at 3306 Collins Lane in Jefferson County, Kentucky, with each couple acquiring an undivided one-half interest. To finance the purchase the Schotts and the Drexlers executed a note for $45,000.00 in favor of appellee, Citizens Fidelity Bank and Trust Company, secured by a mortgage on the real property and an adjoining tract owned solely by the Schotts. Shortly after the acquisition, the Drexlers took residence on the property. According to evidence presented by Cheryl Drexler, the two couples agreed that she and Vincent Drexler in recognition of their possessing the property began to pay two-thirds of the monthly installments on the mortgage and all premiums on homeowners insurance. In addition, Cheryl testified that with only a few exceptions, she and Vincent were wholly responsible for repairs and improvements made to the property.

During the early months of 1979, the Drexlers began to experience financial difficulties and sought Schott’s consent to procure a second mortgage on the property. Schott agreed to do so, but only after the execution of a contract on February 29, 1979, which stipulated that the new second mortgage loan of $10,000.00 from Louisville Trust Bank was for the sole benefit of the Drexlers and set forth his rights against them should they ever be in default on the new indebtedness. For purposes of this appeal, the most important portion of this agreement was a clause stating that Schott had already paid one-half of the original mortgage of $45,000.00. Ultimately, however, Schott never had to enforce this contract as the Drexlers paid the new mortgage in full.

The parties continued to make payments on the original mortgage to Citizens Fidelity until April 1982. Approximately one *813 year earlier the Drexlers divorced resulting in Vincent becoming responsible for payment of the mortgage. After April, 1982, however, he ceased making the payments and in January, 1983, Citizens Fidelity filed the senior action with which we are here concerned, a foreclosure action against Schott and the Drexlers for the unpaid first mortgage balance of $9,951.19. Vincent’s numerous other creditors, including appel-lee, Vogel, and appellee, Liberty National Bank and Trust Company, were named as defendants. Their respective suits on promissory notes against Vincent were later consolidated with Citizen Fidelity’s senior action. After consolidation the trial court eventually ordered a commissioner’s sale of the real property in question. At the sale it was purchased by Schott for $51,338.31. After the payment of the amounts owed and associated charges on the note and mortgage to Citizens Fidelity, a surplus of $36,322.36 remained to be divided among the other parties.

In its individual suit against Vincent Drexler and prior to its consolidation with the other instant cases on February 25, 1983, appellee, Liberty National Bank and Trust Company, procured a prejudgment attachment against Vincent in the amount of its claim on his promissory note for $10,000.00. Appellee, Vogel, earlier on January 17, 1983, had likewise procured a prejudgment attachment against Vincent on its separate suit on Vincent’s promissory note in the amount of $7,281.94. It was recorded February 3, 1983.

On July 7, 1983, an order for summary judgment was entered in the consolidated case in Vogel’s favor against Vincent for $7,281.94 plus interest relating back to January 27, 1983, the date of the prejudgment attachment. On November 1, 1983, Vogel sought and obtained an order of distribution from the trial court for its receiver to distribute to it $8,620.10 of the surplus from the sale held by the receiver. We have carefully examined the record and find that the only party objecting to this motion was Vincent Drexler who did so on the basis that the amount of this distribution would just about extinguish his eventual right to a homestead exemption.

Subsequent to that order the trial court issued findings of fact, conclusions of law and judgment, by which it attempted to determine the various parties’ interest in the same surplus. Schott was found to have been an owner of an undivided one-half interest in the property and entitled to $18,161.18; both Cheryl and Vincent Drex-ler were determined to have been owners of an undivided one-quarter share and, therefore, entitled to $9,080.59 each, Vincent’s share being subject to the claims of his creditors, including Cheryl’s claim for child support arrearage.

The principal issue on both appeals is whether the trial court erred in determining the amount of the excess proceeds to which Schott was entitled. Schott for his part maintains that he should have been awarded $25,669.15, a sum constituting exactly one-half the amount realized at the commissioner’s sale prior to any deductions to satisfy the mortgage to Citizens Fidelity. In support of this proposition he refers us to the contract of February 29, 1979, in which it is stated that he had already paid one-half of the Citizens Fidelity mortgage.

Cheryl, on the other hand, urges the reduction of Schott’s share of the proceeds to $10,006.81 and the concomitant increase of her own and Vincent's portions. She believes this result is necessary on the basis of evidence she submitted that she and Vincent had actually made two-thirds of the mortgage payments to Citizens Fidelity and personally bore the cost of the bulk of the various repairs and improvements to the property. Under the rules of contribution as between cotenants and the equitable concept of melioration, she claims that the share of the proceeds received by herself, Vincent and Schott should be adjusted in recognition of these additional expenses. See Rose v. Holbrook, Ky., 287 S.W.2d 914 (1956); Larmon v. Larmon, 173 Ky. 477, 191 S.W. 110 (1917).

Despite these various legal arguments advanced by the parties, the supporting principles of which we do not question, *814 we regard the issue of the trial court’s determination of their respective interests in the proceeds from the commissioner’s sale as essentially one of fact. Consequently, CR 52.01 limits the scope of our review to an examination of whether the trial court’s determinations are clearly erroneous on the basis of not being supported by substantial evidence.

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Bluebook (online)
692 S.W.2d 810, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schott-v-citizens-fidelity-bank-trust-co-kyctapp-1985.