Summary
In Rowe v. Rowe, 2002 WL 1271679 (Del.Ch. May 28, 2002), the Court of Chancery refused to permit a mother to unilaterally avoid her obligations under a settlement agreement she had executed with her son, pursuant to which the son had dropped litigation against his mother over a parcel of land in exchange for the mother agreeing the son could have the land.
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C.A. No. 16119
Submitted: March 26, 2002
Decided: May 28, 2002
Janet Z. Charlton, Esquire, YOUNG, CONAWAY, STARGATT TAYLOR, LLP, Wilmington, Delaware, Attorney for Plaintiff.
Charles M. Oberly, III, Esquire, OBERLY JENNINGS RHODUNDA, P.A., Wilmington, Delaware, Attorney for Defendants.
MEMORANDUM OPINION
Plaintiff seeks to enforce an oral agreement to settle the action he brought to establish his right of ownership in a particular 3-acre portion of a 12-acre parcel then held of record by his mother. For the reasons that follow plaintiff's motion is granted.
I.
On December 31, 1997, plaintiff Leo R. Rowe sued his mother, Florence Rowe, seeking declaratory and injunctive relief. At issue is 3 acres of a 12-acre tract of real property located on Shipley Road in the Brandywine Hundred section of New Castle County, Delaware. At the time suit was filed, Mrs. Rowe held sole legal title to the 12 acres. She and her late husband, Richard Sr., owned this land as tenants by the entireties until his death in 1985.
Leo's complaint alleges that he is the equitable owner of the 3-acre parcel as the result of an agreement he made with his father in or about 1983. Leo alleges that he and his father walked the land at that time and agreed on boundaries for a 3-acre parcel that was to be subdivided and deeded to Leo. Leo built a house on this parcel and has lived there with his family since 1985. He has also paid one-half of the New Castle County property taxes assessed against the entire 12-acre tract since 1985.
Richard Sr. died in 1985, before the land was subdivided. Thereafter, Leo and his mother never agreed on a plan of subdivision. Eventually, Leo obtained a property survey dated August 28, 1996 (the "1996 Survey") that delineates the boundaries of what he contends is the 3-acre parcel his father agreed to deed to him from an area marked "Other Lands of Richard F. Rowe and Florence M. Rowe."
Pl. Ex. A.
In 1997, Mrs. Rowe decided to move from her home, that was situated on the 12-acre tract in question. As a result of discussions she was having with a real estate developer around the time of her move, Mrs. Rowe told Leo that she intended to sell 10.5 acres of the 12-acre parcel. Since this plan necessarily entailed a sale of a portion of the land Leo claims is his, Leo brought suit in December of 1997. Leo's complaint seeks to enjoin the sale of that portion of land he views as belonging to him and to specifically enforce the transfer of the title from Mrs. Rowe to him. The 1996 Survey is attached to Leo's complaint.
In February 1998, Mrs. Rowe met with Leo, her son Richard Jr. and her daughter Florence (Paul, the forth child, was not present). At that meeting, Mrs. Rowe agreed to give Leo the property he claims in order to "stop the lawsuit." As Florence testified in reference to that meeting:
Dep. Florence Ramey, pp. 26-7 (Ex. A).
Q. . . . I was called down to my brother's, Richard's, house. Mother was there. Leo came in. And we were trying to talk Leo out of proceeding with the lawsuit. And then mother said — mother was embarrassed by it, because she — she said — she felt like it was a family shame for one to sue another. And then, finally, she said, "Well, we'll gave [sic] Leo what he wants if he'll stop the lawsuit.
Q. And you heard her say that?
A. Yeah.
* * *
Q. So, your understanding is that your mother agreed to give Leo the three acres he wanted?
A. Whatever it would take to stop the lawsuit. That's what they were going to do. That was my understanding.
A dispute later arose as to whether Mrs. Rowe's agreement to settle obliged her to transfer to Leo exactly the 3 acres delineated in the 1996 Survey or whether she could satisfy her agreement by conveying to Leo a parcel of a somewhat different size and shape. As will be discussed in greater detail, infra, the several year delay in completing the settlement agreement and subdividing Leo's parcel was related to efforts to work out the details necessary to develop the balance of the 12 acres, including site planning and the need to obtain County approval. The evidence indicates that Leo was cooperative with his mother during this time, showing a willingness to reshape his 3-acre plot to assist her development efforts. Nevertheless, the evidence is also clear that Leo and Mrs. Rowe made a settlement agreement as of that February 1998 meeting (the "Settlement"), and there is ample evidence in the record acknowledging and confirming this understanding.
Aff. Richard F. Rowe, Jr., pp. 1-2 (Def. Ex. 39) ("It was my understanding from that meeting that my mother agreed to convey to Leo three (3) acres of land. I never understood, as I stated in my deposition, that there was an agreement reached as to any particular boundaries."). The court notes, however, that this evidence is inconsistent with the fact that Leo attached the 1996 Survey to his complaint and sued to force the subdivision in accordance with that survey.
A Court of Chancery status report, dated as received February 17, 1999, from Mrs. Rowe's counsel denotes the status of the case as "Settled" and notes the action is "Stayed pending subdivision of property." There are also a number of letters between attorneys representing the parties to this case clearly showing that between 1998 and 2000 all parties referred to this suit as having been resolved pending a subdivision of the land. On June 9, 1999, the court entered an order staying the action "pending the subdivision that is the subject of this litigation." The order recites that the parties have reached a settlement of the litigation, as reported to the court.
Pl. Ex. B.
It appears from the record that Mrs. Rowe soon realized that giving Leo the 3 acres shown on the 1996 survey might not be consistent with the optimal development of the remaining land. Thus, even after the February 1998 agreement to settle, she dealt with the 12 acres in a manner that, while evidencing her agreement to deed Leo a 3-acre parcel, was inconsistent with her agreement to deed the specific 3 acres shown in the 1996 Survey. For example, in May of 1998, Mrs. Rowe signed a contract with Mark McGreevy, a prospective purchaser of the nine remaining acres, one clause of which references Leo's 3 acres in such a way as to indicate that the exact boundaries thereof had yet to be determined: "approximately three (3) acres . . . the exact parameters of which are to be agreed upon by the Seller and Purchaser . . . ." Later in 1998, she transferred her title in the parcel to a limited partnership, Shipley Rowe, L.P. ("Shipley Rowe"). In the instrument of transfer, she included a carve-out giving her the right to withdraw 3 acres of the land conveyed to the partnership without cost upon delivery of written notice from her, but, again the instrument does not specifically describe the 3 acres to be withdrawn.
Def. Ex. 39, Att. B, p. 1.
Dep. Leo R. Rowe, p. 83 (Def. Ex. 1) ("And if you look at this document, in the last paragraph, No. 2, it says Florence retains the right to withdraw and Shipley Rowe agrees to distribute to Florence upon Florence's written demand and without cost or any further consideration of any kind, that portion of the real estate that is the three-acre parcel.").
As a result of subsequent talks with another real estate developer, Mrs. Rowe and other family members determined that a configuration that differed somewhat from the one represented by the 1996 Survey would yield a greater purchase price for the remaining 9 acres. They communicated this to Leo in June of 2000. The record shows that Leo was cooperative with his mother and siblings and was willing to modify the configuration of his land somewhat in order to meet their concerns. At the same time, the written record continued to show his understanding that he was entitled, under the Settlement, to the land described in the 1996 Survey.
On October 20, 2000, Leo's counsel informed the court that Mrs. Rowe was trying to renegotiate the terms of the Settlement and the parties were engaged in discussions. When the parties stipulated to an extension of the lis pendens in December 2000, they wrote: "Plaintiff, Defendant and Shipley Rowe, L.P. have agreed to resolve their differences by conveying to Plaintiff a 3± acre tract of the Land as is fully delineated in Exhibit A attached hereto." While no Exhibit A was attached to the document, it is readily inferable that the parties intended it to be the 1996 Survey.
Mrs. Rowe died in May of 2001. Leo's brother, Richard, as the executor of her estate, and Shipley Rowe have been substituted as Defendants in this case. The parties continue to be at an impasse as to the division of the parcel. Leo now moves to enforce the Settlement.
II.
Delaware law favors the voluntary settlement of contested suits. When parties agree to settle a lawsuit, a binding contract is deemed to have been created. A settlement agreement is construed using the principles of contract interpretation. When deciding a contract dispute, the court looks to whether there are writings that reflect the terms of the agreement. Where, an attorney of record in a pending action acknowledges that a compromise has been reached, he or she is presumed to have lawful authority to do so. Oral settlement agreements reached among the parties to a dispute are binding. Finally, this court has enforced settlements regarding the partition of land.
Neponsit Investment Company v. Abramson, 405 A.2d 97 (Del. 1979).
Corbesco, Inc. v. Local No. 542, International Union of Operation Engineers, 620 F. Supp. 1239 (D. Del. 1985).
Interspace, Inc. v. Morris, 650 F. Supp. 107 (S.D.N.Y. 1986); Jones v. First National Building Corporation, 155 F.2d 815 (10th Cir. 1946).
Clark v. Ryan, 1992 Del. Ch. LEXIS 145 at *13 (Del.Ch.).
Id. citing Aiken v. National Fire Safety Counselors, 127 A.2d 473, 475 (Del.Ch. 1956).
Corbesco, Inc. v. Local No. 542, International Union of Oper., 620 F. Supp. 1239, 1244 (D. Del.).
See, e.g., Clark v. Ryan, supra; Hendry v. Hendry, 1998 Del.Ch. LEXIS 83 (1998).
Applying these precedents to the facts of this case, the court is persuaded that there was a binding agreement to settle reached at the February 1998 family meeting when Mrs. Rowe agreed to give Leo what he wanted in order to stop the lawsuit. The substance of this agreement is confirmed by the testimony of Leo and his sister Florence, who were present at the time. Counsel repeatedly confirmed in correspondence with the court the fact that the parties had reached a settlement, and that agreement is specifically referenced in two orders entered by the court. While much of this written confirmation references the need for the actual subdivision to be made, there is no indication that the parties had not reached agreement on the material terms of the settlement. Nor is there any dispute that Leo complied with his end of the bargain — stopping the lawsuit as a result of the agreement he reached with his mother.
Sometime afterward, Mrs. Rowe realized that a different configuration of the land would allow for a more profitable development of the remaining property. This fact, however, does not alter the binding nature of the agreement made in February 1998, since there was never a subsequent unconditional agreement with Leo modifying the size and shape of the property to be deeded to him. A unilateral change of heart by a party to a settlement agreement is not ground to set the settlement aside.
In re Appraisal of Enstar Corp., 593 A.2d 543, 548 (Del.Ch. 1991), reversed on other grounds, 604 A.2d 404 (Del. 1992).
The court notes that this is not a case involving any dishonesty, fraud, deceit or misrepresentation by Leo that might prevent the enforcement of the Settlement. Nor can the Statute of Frauds be raised to undo the Settlement. Once the parties to an oral agreement have acknowledged its material substance, the Statute of Frauds cannot be used as an affirmative defense.
Hendry v. Hendry, 1998 Del.Ch. LEXIS 83 at *2 (1998), citing Wolf v. Crosby, 377 A.2d 22, 26 (Del.Ch. 1997).
The Settlement reached between Leo and Mrs. Rowe to deed over to him title to the parcel described in the 1996 Survey was a binding contract and will be enforced by this court.
III.
There remains an issue concerning access that may affect the ability of Shipley Rowe to develop the remainder of its land. The question is whether New Castle County will permit direct access to the remaining land by a new entrance on Shipley Road, or, instead, will require that access to that property be via an existing road cut. In the latter case, access to the remaining land will require the imposition of an easement or right of way across the land Leo is entitled to get as a result of the Settlement.
If the land that Shipley Rowe retains as a result of the Settlement is landlocked and there is no other way to access it, then an easement of necessity will have been created. This result is not only supported by precedent but is completely consistent with the obvious intention of Leo's parents that the benefits of ownership of the 12-acre tract should be shared within the Rowe family and that Leo's entitlement to the 3-acre parcel should represent roughly one-quarter of the whole. Certainly no one, including Leo, ever understood that the conveyance to him of 3 of the 12 acres would occur on terms that drastically affected the value of the remaining property to his 3 siblings.
See, e.g., Judge v. Rago, 570 A.2d 253, 258 (Del. 1990) ("[I]f a landowner landlocks one parcel by conveying another, an easement of necessity will arise across the conveyed land, even if no quasi-easement existed").
For these reasons, in the event that Shipley Rowe's ability to develop the remaining acreage depends on a right of access across Leo's land, Leo will be required to grant an express easement in writing over a portion of his property to Shipley Rowe, and its successors in interest. That grant shall be filed of record. The easement will be situated in such a way as to minimize the intrusion onto Leo's land while permitting reasonable access to the remaining property. The cost of building the roadway and doing related site work shall be borne by Shipley Rowe or its successor(s). The maintenance costs shall be borne by all those entitled to use the easement, including Leo (if he uses the road for access), according to a fair and reasonable formula to be agreed upon by the parties and filed of record as part of the grant of easement.
IV.
For the foregoing reasons, plaintiff's motion to enforce the Settlement is granted. The subdivision of Leo's 3 acres, as delineated in the 1996 Survey, is hereby ordered with an easement for access to the remaining property granted to Shipley Rowe, if necessary. Plaintiff shall present a form of order, on notice, within 10 days of the date of this opinion.