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Date: 07-19-2024
Case Style:
Andrew W. Wade and Lisa Wade v. Paul B. Willis and Lisa D. Wade
Case Number: 22-CI-01957
Judge: Thomas L. Travis
Court: Circuit Court, Fayette County, Kentucky
Plaintiff's Attorney:
Defendant's Attorney:
Description:
Lexington, Kentucky landlord and tenant lawyers represented the parties in lease case.
The Willises own a single-family house located at 321 Valley Brook Drive in Lexington ("the Premises"). In 2003, the Willises planned to move and looked into selling or renting the Premises. Allison Willis knew Lisa Wade from work. The Wades had been looking to purchase a home but did not have the
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present financial credit to do so. According to the Willises, the Wades thought they would have the ability to purchase the Premises by February 2004.
The parties entered into a one-year Residential Lease (the "Lease") on July 12, 2003. The Lease has no indication in it that it was prepared by an attorney, and the Wades believe it was drafted by Allison Willis. The term of the Lease was from August 1, 2003, to July 31, 2004. The Wades were to pay $1,264.00 per month in rent for the one-year term of the Lease. The parties simultaneously signed a Lease Addendum, which states:
Landlord agrees that the property as listed above will not be listed for sale or available to be sold at any time to anyone other [than] the Tenants listed in the lease agreement, Andrew and Lisa Wade.
As of the date February 1st of 2004, the property, 321 Valley Brook Drive, will be open for purchase per Contract with the Tenants listed above from Landlords, Paul and Allison Willis. If Tenants make the required monthly payments, as will be listed below, the purchase price of the property of $200,000 will be reduced accordingly.
6 payments with a purchase price of $198,900 (credit of $1,100)[.]
(Emphasis added.)
The Wades could not purchase the property in February 2004 due to their continued lack of financing options. The Wades also could not afford to purchase the property by the end of the original Lease on July 31, 2004. There
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were other offers to sell to the Wades over the years. The attorneys reported to the circuit court continuing negotiations for a purchase. No purchase contract was ever signed. No new lease was ever signed. The Wades continued to pay a monthly amount, although there were times when payments were substantially in arrears.
Years after the expiration of the Lease, the Willises decided to refinance the Premises. They then again offered to sell the Premises to the Wades for the appraised amount minus realtor costs. The Wades reportedly agreed, but, once again, they could not obtain financing for such a transaction. The Willises refinanced the Premises, and the Wades continued to pay a monthly amount which increased because of the cost of the refinancing.
The Willises divorced in 2021. While they were dividing their marital estate in the divorce proceedings, they offered to obtain an appraisal and sell the Premises to the Wades at market value. The Wades did not want to move out, but again no contract followed.
In June 2022, the Wades filed a Petition to Enforce Option to Purchase Real Property in Fayette Circuit Court seeking to exercise the Lease Addendum option to purchase the Premises. The Willises filed an Answer denying any present right for the Wades to buy the property. The Willises filed a Counterclaim, asserting the tenancy had been terminated, and they asked for a writ
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of possession for the property. The pendency of this case continued the pause of any vacating of the Premises, although the Willises gave required notice to the Wades to vacate, which had been sent to the Wades after the suit was filed.
The Wades then filed a "Motion for Declaratory Judgment" asking the circuit court to "declare the rights of the parties under the option contract." The Willises filed a Response and attached the Affidavit of Allison Willis. The circuit court conducted a hearing on the Wades' Motion in October 2022. At the conclusion of that hearing, the judge stated the option to buy had passed when the original Lease term ended in 2004, as there was no clear and convincing evidence the parties intended the option to extend past this date. The judge "overruled"[1] the Wades' Motion for Declaratory Judgment. In November 2022, the circuit court issued an Order summarily memorializing this decision.
On October 31, 2022, counsel for the Willises sent a second notice letter to the Wades advising them that the continuing tenancy would not be allowed after November 30. The Willises' deadline of November 30 passed, and the Wades did not move out of the Premises. The Willises then filed a Motion for Summary Judgment and Writ of Possession. The Willises argued the option to purchase in the Lease Addendum was not exercised, the Lease had expired, the
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Wades were month-to-month tenants, and the Willises gave timely notice to the Wades to vacate the Premises.
The Wades filed a Response, asserting they were not month-to-month tenants. Without verification by way of a sworn affidavit, the Wades attached an email dated August 9, 2007, ostensibly from the Willises to Mrs. Wade, although it is not clear from the address what the email connection is with Mrs. Wade. If the email was sent to Mrs. Wade, the wording is curious, because it is clearly addressed for the benefit of some third party: "We, Paul and Allison Willis, are the primary mortgage holders for the property at 321 Valley Brook Drive in Lexington Kentucky. Andy and Lisa Wade have been our 'rent to own' tenants for the past 4 years. They pay a mortgage payment of $1650 a month." We gather from comments during the hearings before the circuit court that the purpose of this email may have been for a potential purchase creditor of the Wades or for bankruptcy purposes.
The Wades argued the 2007 email showed they were considered by the Willises to be "rent-to-own" tenants still with an open option to purchase the Premises. But the email is demonstrably inaccurate. There was no written purchase contract and no mortgage held by the Willises. The only mortgage was one held by a bank against the Willises. The email also does not purport to rewrite the Lease or the Lease Addendum. Consistent with the termination of the Lease
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and the connected option, the Willises maintained owner's (not mortgage) insurance for the property, and the Willises paid the property taxes. The Lease addressed the types of insurance to be maintained, the Wades were to buy renters' insurance.
The circuit court held a hearing on the Willises' Motion for Summary Judgment. The circuit court then issued an Order in January 2023 granting summary judgment and the issuance of a writ of possession to the Willises. In this later order, the circuit court commented on its November 2022 Order noting that any option to buy had expired. As to the 2007 email where the Willises ostensibly called the Wades "rent-to-own" tenants, the court found the email did not create a genuine issue of material fact.
The circuit court overall ruled that the term of the Lease had ended and that the parties had not entered into a new agreement. The court concluded that the Wades were month-to-month tenants. The Willises gave the Wades proper notice of the Lease being terminated and were entitled to possession of the Premises. This Order granting summary judgment did not have language stating it was final and appealable.
On January 29, 2023, the Wades appealed the circuit court's Order granting summary judgment. This appeal was designated No. 2023-CA-0116-MR (eventually consolidated with No. 2023-CA-1284-MR). The original attorney for
the Wades improperly filed a Prehearing Statement in the circuit court instead of this Court. In February 2023, the Wades' original attorney was convicted on federal fraud charges and was sentenced to prison. The Wades apparently learned about the conviction from the original attorney's secretary.
After a failure to properly file the Prehearing Statement for the first appeal, this Court entered an Order dated March 24, 2023, holding the first appeal in abeyance for 30 days to permit the Wades to retain new counsel. The Wades then retained a new attorney.
In August 2023, the Wades and their new attorney filed a Motion to Reconsider citing CR[2] 60.02(f) and asking the circuit court to reconsider the November 2022 Order overruling the Wades' Motion for Declaratory Judgment and the January 2023 Order granting summary judgment to the Willises, which had already been appealed. The Motion also asked for a determination as to whether all matters before the court have been adjudicated.
The Wades' Motion to Reconsider included contentions that the Wades repeatedly informed the Willises of their intention to eventually purchase the Premises. The Motion attached what purports to be the Affidavit of Lisa Wade, although the affidavit in the record is not sworn. In this offered affidavit, Lisa Wade stated all parties understood that the Lease was really in the nature of an installment purchase contract from the beginning. The Wades also asserted that their original attorney failed to present facts to the court regarding the parties' twenty-year relationship which would have established that they were considered rent-to-own tenants. The Wades attached to the unsworn affidavit over ninety pages of approximately 900 emails between Lisa Wade and Allison Willis.
In October 2023, the circuit court issued its Order overruling the Wades' Motion to Reconsider. The court also stated all claims and causes of action have been fully adjudicated, and thus the matter is final and appealable. The second appeal followed.
Outcome: The circuit court did not err in granting the Willises' Motion for Summary Judgment which was a final judgment. The court also did not abuse its discretion in denying relief under CR 60.02. The Orders of the Fayette Circuit Court dated November 7, 2022; January 3, 2023; and October 3, 2023, are AFFIRMED.
Plaintiff's Experts:
Defendant's Experts:
Comments: