COA affirms reformation of Goshen property deeds to recognize life estate

The Indiana Court of Appeals has affirmed judgment for a Goshen woman whose request was granted for reformation of two property deeds to include a life estate that had been granted to her under prior contracts , despite opposition from a tenant on the property.

Beginning in 2001, Linda and Bernard Jurus owned 10 acres of land in Goshen with a large home on the property where they resided, as well as a smaller home that they rented out to Becky Cutter.

At some point the Jurus’ sold their real estate to Joseph Bailey, a friend of Cutters, but also signed an addendum granting the Juruses the right to reside on the land “for their natural lifetime.” Among other things, they agreed to pay for the big house and wouldn’t interfere with improvements the new owner makes so long as they had unlimited access to the full 10 acres. Cutter also continued to live in the rented home.

After Bernard died in 2014, Linda and Bailey signed another contract for sale stating that Bailey would purchase the property subject to Linda receiving “a life estate in the real estate upon which is erected the main residence, together with ingress and egress.” When she signed a warranty deed and transferred the land to Bailey, however, there was no mention to her having a life estate interest in the land.

Bailey died not long after he was granted permission to tear down the small house and build a new one to replace it, with the intention of eventually demolishing the larger house at the termination of the life lease.

The new home was built and Cutter resided there when Bailey died, and she signed a personal representative’s deed conveying the land to herself without mention of the life estate interest.

In 2020, Linda filed a civil complaint, asking the trial court to reform the 2015 and 2019 deeds to include a life estate, which it ultimately granted. The Indiana Court of Appeals affirmed in Becky Cutter v. Linda Rothrock Jurus, 21A-PL-00200,  disagreeing with Cutter’s assertion that she is entitled to complete outright ownership because “under the doctrine of merger, the parties’ intentions must be understood from the terms of the 2015 Warranty Deed alone, rather than along with Linda and Bailey’s prior agreements.”

“Cutter further states that (Linda) Jurus’ claim for reformation must fail because Bailey passed away prior to this lawsuit, and she concludes reformation should be ‘barred where there has been a death of witnesses who could have provided valuable testimony regarding the conveyance of land,’” Senior Judge Randy Shepard wrote in concluding that the trial court did not err in denying her motion.

“The case Cutter cites on this point, Angel v. Powelson, 977 N.E.2d 434 (Ind. Ct. App. 2012), is distinguishable,” it added, noting that by contrast, Cutter did not raise a defense of laches, and far less time passed between the execution of the deeds at issue.

The appellate court also declined to conclude there was a dispute of material fact as to mutual mistake and disagreed that Bailey made supposedly contradictory statements during the 2016 variance proceeding as establishing a dispute of fact as to his intent.

“In light of Bailey’s clear statement of intent in the Addendum and Land Contract, we cannot conclude his imprecise statements during the variance proceeding established a dispute of material fact as to his intent,” it wrote. “In the absence of a dispute of material fact, the trial court did not err in granting Jurus’ request for reformation to recognize her life estate.”