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Lewis v. Jones

United States District Court, E.D. Kentucky, Southern Division

March 13, 2019

RANDALL LEWIS, et al., Plaintiffs,
v.
GERALD JONES, et al., Defendants.

          ORDER AND OPINION

          KAREN K. CALDWELL, CHIEF JUDGE.

         This matter is before the Court on cross-motions for summary judgment. [DE 41; DE 42; DE 43.] Plaintiffs Randall and Tonya Lewis have moved for partial summary judgment on the issue of specific performance and on their breach of contract claim against Defendant Gerald Jones. [DE 41.] Defendants Gerald Jones and Laurel Ridge Landfill, LLC have each moved for summary judgment on all claims being presented against them. For reasons stated below: (1) the Plaintiffs' motion for partial summary judgment is GRANTED in part and DENIED in part; (2) Defendant Gerald Jones's motion for summary judgment on all claims is GRANTED in part and DENIED in part; and (3) Defendant Laurel Ridge's motion for summary judgment on all claims is GRANTED in part and DENIED in part.

         FACTS & BACKGROUND

         The Jones family farm covers almost 100 acres in Laurel County, Kentucky. [DE 41-1, at 1-3.] Defendant Gerald Jones became the sole possessor of this property after his mother, Georgia Jones, deeded two tracts of land to him. Jones has owned the main tract of the property since September of 2009 and the rear tract, which borders the Laurel Ridge Landfill, since December of 2010. [DE 41-1, at 2.] Though the Jones family farm has never been subdivided by deed, the property appears to have three distinct parts. [DE 41-1, at 17; DE 41-11; DE 41-16.] First is the “front 17 acres.” [DE 41-1, at 3.] This parcel of land sits east of Highway 552 and abuts Plaintiffs Randall and Tonya Lewis's property. [DE 42-1, at 17.] In his deposition, Jones attested that the 17-acre figure was a rough estimate and that the actual number is likely closer to 19 acres. Nevertheless, at all relevant times, Randall Lewis, Jones, and Laurel Ridge referred to the Jones's property east of Highway 552 as the front 17 acres. The will Court do the same. Although the Jones family once used the front 17 acres for its cattle operation, the land sat idle after Gerald Jones's mother moved to a nursing home. [DE 42-2, at 14-16.]

         The residential portion of the Jones family property is called the “middle 52 acres.” [DE 41-11, DE 42-2, at 71.] Sitting west of Highway 552, the middle 52 acres includes a five-bedroom brick house and a metal garage. [DE 42-1, at 17.] Together, the front 17 acres and the middle 52 acres form the main tract that was deeded to Jones in September of 2009. Last is the “27 back acres” of the Jones family property. [DE 41-11.] This parcel was deeded to Gerald Jones in December of 2010 and sits adjacent to the Laurel Ridge Landfill. [DE 41-1, at 7.]

         Plaintiffs Randall and Tonya Lewis's property adjoins the front 17 acres of the Jones family farm. [DE 41-1, at 1.] The Laurel Ridge Landfill is nearby. [DE 41-1, at 1.] The Lewises maintain a residence, herd cattle, and operate a body shop business on this property. [DE 42-2, at 6.]

         By 2013, Jones had moved to Cincinnati and his father, Charles Edward Jones, had died. Jones's mother, however, remained on the farm. [DE 42-1, at 9.] Though he lived and worked in Cincinnati, Jones would frequently return to Laurel County to help her maintain the property. [DE 42-1, at 12.]

         Sometime in the fall of 2013, Randall Lewis noticed that Jones was mowing the property. Lewis approached Jones and expressed his desire to purchase the property. There is some dispute as to how the rest of the conversation unfolded, but Jones claims that the communications were vague and that he merely conveyed to Lewis that at some point in the distant future, he would consider disposing of the property. [DE 42-1, at 13-14.] To the contrary, Lewis asserts that Jones said that the front 17 acres were currently for sale and that the rest of the property would be disposed of once Jones's mother left the farm. [DE 42-2, at 17.] According to Lewis, Jones did not have a price in mind at the time but advised that he would soon return with one. Lewis further contends that approximately thirty days after this preliminary conversation, Jones called him and offered the front 17 acres for a non-negotiable price of $59, 500 ($3, 500 per acre). [DE 42-2, at 18.] As a result of the above conversations, Lewis had an appraisal performed on the front 17 acres began the underwriting process for a loan. [DE 42-2.]

         Though the parties differ in their characterizations of these discussions, it is undisputed that on October 8, 2013, the parties executed a document labeled as a real estate purchase contract. [DE 41-6, at 1.] The form document listed Jones and Lewis as the buyer and seller, provided the address of the property, and described the parcel to be sold as a “17 acre farm.” [DE 41-6, at 1.] The document also set the purchase price at $59, 500, with the entire balance due at closing. No. earnest money was required.

         It is important to note, however, that the form document had blanks that were never filled in for (1) the buyer and seller's right to terminate the contract within a certain number of days if financing was not approved, (2) the closing date, and (3) the allocation of closing costs. [DE 41-6, at 1.] Indeed, the Defendants suggest that more fields were left blank than were filled in on the form. [DE 43-1, at 12.]

         Jones and Lewis did not sign the real estate purchase document in each other's presence. [DE 42-2, at 49.] Nor were their signatures notarized. Instead, the document was simply faxed back and forth between the two parties. [DE 42-2, at 49.] In his deposition, Lewis could not recall who signed the document first or who filled in the document fields. [DE 42-2, at 50.] Nevertheless, Lewis asserts that his attorney prepared a draft deed and scheduled closing for February 24, 2014. [DE 41-1, at 3.] Jones denies having spoken to Lewis's attorney regarding a closing date. [DE 42-1, at 25.]

         On December 17, 2013, Farm Credit Mid-America Bank approved Lewis's loan request, granting him an amount of $50, 080.50. [DE 41-8.] As part of the underwriting process, the Bank enlisted a law firm to perform a title search on the property. [DE 41-9.] The search revealed that Gerald Jones's property was subject to a lis pendens. [DE 41-9; DE 42-2, at 26.] It was revealed that Jones's mother had initiated an action against him, seeking to invalidate the 2009 and 2010 deeds that she had executed in his favor. Because of the lis pendens, the bank indicated to Lewis that it would be unable to move forward with closing. [DE 41-9; DE 42-2, at 27.]

         Lewis renewed his financing for the front 17 acres in June of 2015 and in January of 2016. [DE 42-2, at 28-29.] Lewis claims that he did so on the recommendation of Jones. Specifically, Lewis asserts that Jones had assured him that the lis pendens would be resolved soon and advised him to keep his financing active so the two could close the very moment the legal hold was released. [DE 42-2, at 27.] Jones challenges this account, arguing that he and Lewis never discussed the prospect of renewed financing.

         The record reveals that while the lis pendens on the Jones family farm was pending, Jones granted Lewis a lease that enabled Lewis to enter the front 17 acres of the property and make certain improvements. [DE 41-1, at 23.] The parties, however, dispute the motivation behind this arrangement. Lewis claims that it was a concession that allowed him to prepare for the inevitable transfer of the front 17 acres. [DE 42-2, at 27.] Relying on the lease, Lewis mowed, cut weeds, and removed trees on the property. Jones, on the other hand, claims that the lease had nothing to do with the lis pendens or the property negotiations. Rather, he suggests that the primary purpose of the lease was to grant Randall Lewis access so he could tend to the fence row. [DE 42-1, at 31.]

         In December of 2015, Gerald Jones met with Lewis at Lewis's body shop. [DE 42-2, at 68.] Lewis's wife Tonya and his son were also present. [DE 42-2, at 68.] At the meeting, the parties discussed the terms for the sale and purchase of the entire Jones family farm. Jones supposedly stated that he wanted $350, 000 for the 52 middle acres using owner financing and wanted to do a like/kind swap involving property that Lewis owned in Harlan, Kentucky.

         On December 22, 2015, Jones sent Randall and Tonya Lewis an email that memorialized their previous discussion. [DE 41-11.] Jones began the email by noting that he “just wanted to touch base and get an email so [the parties could] share information.” [DE 41-11, at 1.] Jones advised that it was his preference to sell the farm to the Lewises, even though Laurel Ridge had previously offered $500, 000 for it. [DE 41-11, at 1.] He then went into the particulars of the potential sale. First, Jones proclaimed that the lis pendens would be removed by January 11, 2016. Second, he explained the benefits of doing a like/kind swap involving the back 27 acres of the Jones property and 109 acres in Harlan, Kentucky that Lewis owned. He noted, however, that the swap was “contingent” on being able to obtain a “building permit to allow a cabin type structure to be built.” Third, Jones confirmed that the price of the front 17 acres remained at $59, 500. Fourth, Jones indicated a desire to do owner financing for the middle 52 acres. For a principle of $350, 000, he suggested a 15-year mortgage at 3.5%. He stated, however, that if Lewis felt differently the two could “research and set to .25 lower than the average bank mortgage.” [DE 41-11, at 1.] Lewis claims that upon receipt of Jones's email, he called Jones to accept what he construed as an offer to sell the farm. [DE 42-2, at 78.] Jones, however, denies that this phone call ever took place. [DE 42-1, at 33.]

         In early 2016, Lewis attempted to reach Jones on several occasions to check the status of the lis pendens. [DE 42-2, at 33.] Upon using a friend's cell phone, Lewis finally got through to Jones. [DE 42-2, at 33.] Lewis contends that Jones claimed that he was depressed and made several excuses for not keeping Lewis apprised of the status of the legal hold. [DE 42-2, at 81.] Following this conversation, Lewis continued to check in with Jones. On February 29, 2016, Jones sent Lewis an email with the subject heading: “Got you[r] calls, working over the weekend.” In this email, he apologized for not answering Lewis's phone calls and explained that he had still not checked the status of the legal hold. He also informed Lewis that he would reach out when he was “emotionally ready” to broach the subject of the land purchase again. [DE 44-9, at 2.] Despite the continued efforts of Lewis, the two would not communicate again until May of 2016.

         At or around this time (early 2016), Jones began negotiating the sale of the entire family farm to Laurel Ridge Landfill. [DE 42-1, at 50.] Laurel Ridge had attempted to purchase the property in the past, offering $500, 000 to Jones's mother. The deal, however, never closed. [DE 43-12.] Knowing that Jones was now the sole owner of the farm, Laurel Ridge dispatched Nelson Breeden reach out to Jones and begin a dialogue.

         On March 1, 2016, Jones sent an email to Breeden advising that he had “been approached by a neighbor who desperately [did not] want a land fill in his front yard.” [DE 41-14.] Jones also relayed that he was “waiting to hear from all parties about their potential of a bid to purchase.” [DE 41-14.] Laurel Ridge interpreted Jones's email as a request for an offer and sprung into action. Breeden had an appraisal performed on the property and notified Jones of the resulting figure of $350, 000. He further informed Jones that the appraisal had been sent to the pertinent parties and that an offer was soon to come. [DE 43- 9, at 3.] In response, Jones expressed his dissatisfaction with the $350, 000 figure. However, he indicated that he would wait for Laurel Ridge's offer before continuing the process with other interested parties. [DE 43-9.] Although he personally did not want to see the farm turned into a landfill, Jones relayed to Breeden that he would give Laurel Ridge the opportunity to “chang[e] his mind.” [DE 43-9, at 2.]

         Laurel Ridge eventually extended Jones an offer of $500, 000 for the entire property. On April 8, 2016, Jones countered for $875, 000. [DE 41-16.] In support this figure, Jones submitted that the purchase of his property would allow Laurel Ridge to expand their operations “without having to relocate a single asset.” [DE 41-16, at 1.] On April 15, 2016, Jones sent Breeden another email, representing that he was standing firm at $875, 000. [DE 44-22, at 2.] He also conveyed that he looked forward to Laurel Ridge's future offers but would be “continuing forward with the other interested parties.” [DE 44-22, at 2.]

         On April 18, 2016, Jones emailed Breeden indicating that he had reached a tentative agreement to sell the farm to a third party. Jones then went through the particulars of his arrangement with Lewis. He informed Breeden of the sale of the front 17 acres, the owner financing of the middle 52 acres, and the like in kind swap for the rear 27 acres. [DE 41-17, at 1.] Jones, however, ended the email by saying, “I'm still offering the entire farm . . . for the firm price of $875, 000, but there are no promises or warranties made as to the life of this offer.” [DE 41-17, at 2.] Breeden accepted Jones's offer via email on April 20, 2016. Laurel Ridge's attorney, Richard Wood, reached out to Jones and the two began to discuss the particulars of closing. [DE 43-10, at 2.]

         On April 22, 2016, Jones emailed Breeden inquiring whether Laurel Ridge had a “lesser desire for the front 17 acres” of the property. [DE 41-19.] Jones informed Breeden that if Laurel Ridge did not buy this specific tract, it would allow the adjacent owner, Lewis, to expand his vehicle repair business. [DE 41-19.] He then advised that if Laurel Ridge was willing to forgo the acquisition of the front 17 acres, he would reduce the purchase price by the same “amount of the sale to the neighbor - $59, 500.” [DE 41-19.] Laurel Ridge declined the invitation and the parties executed a sales contract for the entire Jones family property on April 26, 2016. [DE 42-1, at 69.] Closing was set for May 31, 2016.

         In late May of 2016, a surveyor for Laurel Ridge went out to the Jones family farm. [DE 43-14, at 4.] Lewis approached the surveyor and told him that he had binding legal contracts for the property. [DE 43-14, at 4.] The surveyor reported his conversation with Lewis to representatives of Laurel Ridge. On May 25, 2016, Richard Wood, Laurel Ridge's attorney, emailed Jones and inquired about Lewis's claims to the property.

         That very same day, May 25, 2016, Lewis's father happened to be in the Cincinnati area. [DE 42-2, at 81.] Lewis gave his father Jones's address and told him to stop by and tell Jones to call him. [DE 42-2, at 81.] Lewis claims that once Jones saw his father at the door, he immediately dialed Lewis and told him that entire farm had been sold to Laurel Ridge for $875, 000. [DE 42-2, at 81.] After hearing this, Lewis immediately phoned Nelson Breeden of Laurel Ridge. [DE 42-2, at 85.] The parties describe this phone call as very contentious. It is alleged that Lewis told Breeden of his claims and indicated that he would seek legal redress. Lewis did not, however, offer to send Breeden the purported sales contracts. Nor did Breeden ask for them. [DE 42-2, at 86-89.] Lewis suggests that the conversation likely ended with him hanging up.

         On May 26, 2016, Jones emailed Wood and Breeden with respect to Lewis's claim to the property. [DE 41-21, at 1.] The email specifically addressed the front 17 acres. Lewis first advised that he was unable to locate the October 8, 2013 real estate purchase document. [DE 41-21, at 1.] He recounted, however, that the one-page document “simply stated the agree to sale amount.” [DE 41-21.] Jones then noted that if there was a “legal issue with going forward” the parties would “have to reach another agreement which doesn't include the front 17 acres.” [DE 41-21, at 1.] Wood responded to the email and alerted Jones that Laurel Ridge was willing to proceed with the purchase notwithstanding the potential legal issue. [DE 41-21, at 2.] That said, Wood informed Lewis that Laurel Ridge would not be waiving “any claims for breach of contract or otherwise if a claim is made against [it] by Mr. Lewis.”. [DE 41-21.] Of note, Wood expressed that “[w]ithout seeing [Jones's] agreement with Randy Lewis, neither [he] nor the title insurance company [could] determine whether the agreement ha[d] expired by its terms or even [rose] to a level of a binding contract to sell the property.” [DE 41-21, at 1.] Later that evening, Jones informed Wood of his desire to proceed with the sale and he promised to “obtain a written release from the agreement with Mr. Lewis.” [DE 41-21.] The deal closed on May 31, 2016 after the lis pendens was released. Laurel Ridge's title insurance policy included an exception stating that:

This policy does not insure against rights, claims, or the adverse interests of Randall Lewis under a purported unrecorded contract in and to the property to be insured, and will not cover any legal fees and/or expenses to address of defend said claims. [DE 44-24, at 3.]

         In June of 2016, Gerald Jones wrote Lewis a letter that terminated the lease granted on August 4, 2015. [DE 42-2, at 34.] The letter explained that the property had been sold to another party and was no longer available for rent. [DE 42-2, at 34.] Attached to the letter was a check for $2, 500 in “consideration for [Lewis's] time and energies.” [DE 42-2, at 32.]

         Initially filed in Laurel Circuit Court, the action was removed to this Court on February 16, 2017. [DE 1.] Plaintiffs Randall and Tonya Lewis seek specific performance and assert claims of tortious interference with business advantage and unjust enrichment against Defendant Laurel Ridge Landfill and breach of contract, unjust enrichment, negligent misrepresentation, ...


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