Wednesday, November 25, 2009

Oh Shenandoah!

The West Virginia Supreme Court affirmed the grant of summary judgment to a law firm but reversed summary judgment in favor of the wife of a former firm lawyer in a case involving a dispute over the purchase of land next to the Shenandoah River. The trial court had denied summary judgment to the individual lawyer. The key facts:

This case concerns an undeveloped 6.87 acre tract of land on the shore of the Shenandoah River in Jefferson County. The appellants and plaintiffs-below, Stanley and Katherine Dunn, had a written option to purchase approximately 460 acres of farmland which encompassed the 6.87 acre tract. However, the Dunns claim that the lawyer who drafted the written option _ appellee and defendant-below Douglas S. Rockwell (“Lawyer Rockwell”) _ improperly purchased the 6.87 acre tract and concealed the extent of the purchase from the Dunns. The question we are asked to resolve is whether all or part of the Dunns' lawsuit _ against Lawyer Rockwell's wife, appellee and defendant-below Carol Rockwell, and against Lawyer Rockwell's former law firm, appellee and defendant-below Martin & Seibert _ regarding the 6.87 acre tract is barred by any statutes of limitation.

            In 2001, Hugh N. Hoover and his sister, Dianna Hoover Gray, owned approximately 460 acres of contiguous farmland in Jefferson County which bordered the Shenandoah River. In December 2001, Carol Rockwell, received title from Mr. Hoover and Ms. Gray to a three-acre parcel of that farmland along the Shenandoah River.

            In 2002, the Dunns began negotiating with Hugh Hoover to purchase the remaining Hoover/Gray farmland. Mr. Dunn could not yet afford to purchase the farmland, and so he hired his friend, Lawyer Rockwell, to draft an agreement giving the Dunns the exclusive option to purchase the farmland. At that time _ and until March 2004 _ Lawyer Rockwell was employed at the law firm of Martin & Seibert in Charles Town, West Virginia. Lawyer Rockwell drafted the option agreement and gave it to Mr. Dunn.

            On June 27, 2002, Stanley Dunn and Hugh Hoover executed the option, which permitted the Dunns to buy “460 acres more or less by survey” of the Hoover/Gray farmland for $6,000.00 per acre. The property subject to the option surrounded the three-acre parcel bought by the Rockwells in 2001. The 2002 option agreement was set to expire 12 months from the date it was executed.

            In November or December 2002, Lawyer Rockwell and his wife sought to buy additional land surrounding their three-acre parcel. Knowing that the land was subject to Mr. Dunn's June 27, 2002 option _ the three-acre parcel was bordered on one side by the river and the other three sides by the Hoover/Gray farmland _ Lawyer Rockwell orally asked Mr. Dunn if he could buy some of the optioned acreage from Mr. Hoover and Ms. Gray in order to “square up” or “round off” his three-acre parcel. Mr. Dunn agreed, and later told Hugh Hoover that this was acceptable.

            In December 2002, a surveyor prepared a map of the acreage that Lawyer Rockwell and his wife sought to purchase out of the optioned property. The map designated a 6.87 acre tract that squarely surrounded the Rockwells' three-acre residential lot, but which also extended north in a panhandle or dogleg along the Shenandoah riverbank approximately 115 feet wide and 589 feet long. The Rockwells paid with two checks _ one from Carol Rockwell and the other from Lawyer Rockwell _ and on December 27, 2002, the 6.87 acre tract was deeded solely to Ms. Rockwell. The closing on the Rockwells' acquisition of the 6.87 acre tract was handled at the Martin & Seibert law offices.

            The Dunns allege that they never agreed that the Rockwells could purchase the 589-foot long strip fronting the Shenandoah River. The Dunns also assert that Lawyer Rockwell never advised them, orally or in writing, of the survey, the purchase or the precise size and location of the 6.87 acre tract. The Dunns also assert that Lawyer Rockwell never advised them that they should seek independent advice to protect themselves with regard to the Rockwells' December 2002 purchase.

            In March 2003, Mr. Dunn asked Lawyer Rockwell to draft an extension for the 2002 option to purchase, which Lawyer Rockwell did. The written extension made no mention of the 6.87 acre tract that had been deeded to Lawyer Rockwell's wife, nor did it exclude the 6.87 acre tract from the new option. The extension extended the option end date from June 27, 2003 to August 1, 2003, when the option expired without Mr. Dunn purchasing the property. However, Mr. Dunn asserts that he and Mr. Hoover and Ms. Gray continued negotiating toward a purchase as though the option were still in effect.

            Sometime during the Summer of 2003, Mr. Dunn and Mr. Hoover negotiated a new option agreement which was also drafted by Lawyer Rockwell. The option agreement was for a 24-month period, and raised the price to $6,500.00 per acre “which the parties estimate shall contain approximately 500 acres.” Again, the Rockwells' 6.87 acre tract was not excluded from the new option written by Lawyer Rockwell. Mr. Dunn and Mr. Hoover signed the agreement on August 26, 2003, and Mr. Dunn tendered a check for $50,000.00 in exchange for the option.

            It was during this time period, in mid-2003, that events occurred giving rise to the Dunns' statute of limitation problems and to the instant appeal.

            At the north edge of the 589-foot dogleg of river front land bought by the Rockwells there was an unrelated parcel of land owned by Mr. Hoover and Ms. Gray _ but not subject to the Dunn option _ with a house. In July 2003, Henry and Dale Walter bought the parcel and house. The house, however, was exposed to flooding from the river and the Walters wanted additional land to build above the flood plain.

            Sometime in August or September 2003, Hugh Hoover approached Mr. Dunn seeking permission to sell some of the land surrounding the Walters' tract _ land which was subject to the Dunns' exclusive option to purchase _ to the Walters. Mr. Dunn says he responded (with emphasis added):

                I told him I had no problem with him adding onto the back of it, it was just a rough hillside. But I told him, also, that I did not want to give him anything between the two, the Rockwell property . . . and that house. And he looked at me real funny and said, well, Stanley, Doug [Rockwell] has already taken that . . . .

As we relate in greater detail in the discussion, infra, by no later than September 29, 2003, the Dunns learned that the Rockwells had purchased river front property subject to the 2002 option that not only “squared up” their three-acre property, but which extended far from their residence along the Shenandoah River. The Dunns state they did not conduct further investigation of the size or location of the Rockwells' purchase at that time, partly because they did not want to upset Mr. Hoover and Ms. Gray and lose the opportunity to purchase the Hoover/Gray farmland, and partly because they feared that Lawyer Rockwell might steer the Hoover/Gray farmland to another buyer.

            Lawyer Rockwell stopped working for defendant Martin & Seibert on March 31, 2004. The Dunns, however, contend that in the Spring of 2005, Mr. Dunn asked Lawyer Rockwell to prepare another extension agreement relating to the 2003 option. Lawyer Rockwell prepared the extension agreement for Mr. Dunn (but the agreement was never executed).

            In late 2005, the Dunns were financially able to purchase the Hoover/Gray farmland. On October 27, 2005, the Dunns closed on the purchase of the Hoover-Gray farmland. The Dunns allege that at the closing, for the first time, they saw the December 27, 2002, deed to Carol Rockwell for the 6.87 acre tract with an accompanying survey plat showing the 589-foot dogleg along the Shenandoah River. The Dunns contend that this is when they first learned of the survey and the precise size and location of the Rockwells' acquisition of land that was subject to the 2002 option.

The Dunns and the Rockwells then engaged in several discussions and exchanged correspondence about the 6.87 acre tract. When the Rockwells refused to give any portion of the tract to the Dunns (the Dunns appear to have offered the Rockwells the purchase price they paid plus interest), on August 21, 2006, the Dunns filed this lawsuit against the Rockwells and the Martin & Seibert law firm.

A dissent would affirm the grant of summary judgment to the lawyer's spouse (Mike Frisch)

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Interesting, thanks for the info. As a UK firm of solicitors it is interesting to note the difference between US and UK legal affairs. I wonder if this would have happened in the same way in the UK....

Posted by: The Legal Digest | Nov 26, 2009 4:33:38 AM

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