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Casenotes

Indiana

Joint Tenancy; Tenancy by the Entirety

Ramer v Smith, 896 NE2d 563 (Ind Ct App 2008)

Facts:Betty and Richard Smith originally owned a 78 acre parcel of real estate (the Estate). In 1998, Burdette and Janice Ramer began construction of a residence on the Estate. Richard assisted the Ramers with excavation work and also provided some equipment for the construction. The Ramers began living in the basement of the uncompleted residence in December of 1998.

On May 17, 2000, the Smiths executed a warranty deed (Deed 1) conveying a 6.60 acre tract of the Estate, including the Ramers' unfinished residence, to the Ramers. However, problems with the conveyance arose involving the local zoning authority. Subsequently, the Ramers and Smiths executed a second warranty deed (Deed 2) on September 6, 2004, with the Smiths conveying a 16.99 acre tract and the Ramers conveying the 6.60 acre tract to all four individuals, creating a 23.59 acre tract (the Property). The granting clause of Deed 2 reads: "RICHARD W. SMITH and BETTY J. SMITH, husband and wife, and BURDETTE RAMER and JANICE RAMER, husband and wife, &€¦Conveys and warrants to: RICHARD W. SMITH, BETTY J. SMITH, BURDETTE RAMER, AND JANICE RAMER, as Joint Tenants With right [sic] of Survivorship...."

On November 6, 2004, Richard died. The Ramers completed construction of their residence in 2005. On November 17, 2006, Betty filed a petition for partition of the Property. The trial court concluded that Deed 2 conveyed a one-half joint tenancy interest to the Smiths, which they held as tenants by the entireties, and one-half joint tenancy in the Ramers, which they held as tenants by the entireties. The trial court further concluded that Betty succeeded to Richard's interest in Property and therefore the Property should be partitioned one-half to Betty and one-half to the Ramers.

The trial court refused to adjust the partition of the Property because of any alleged contributions made by the Ramers. The trial court also concluded that the Property cannot be divided into equal shares without physically dividing the residence, and therefore the trial court appointed a commissioner to sell the property at public sale. The Ramers appealed.

Holding:Reversed in part, affirmed in part, and remanded. The court of appeals's threshold question was whether Deed 2 created a joint estate among Richard, Betty, Burdette and Janice as individuals or between Richard and Betty, as husband and wife, and Burdette and Janice, as husband and wife, with each couple taking as tenants by the entirety. The court held that as a general rule, where a deed conveys real estate to two married couples jointly, each couple takes an undivided one-half interest as tenants by the entireties. However, the conveyance to two married couples will be treated as a joint tenancy or a tenancy in common between all four individuals if such an intention is clearly expressed in the deed.

Looking at the granting clause of Deed 2, the court held that the language clearly expressed the intent to create a joint tenancy among the four individuals. The fact that "husband and wife" was included in the grantor language but was absent in the grantee language indicated the intent to treat the parties differently under each capacity. Also, the language "Joint Tenants With right [sic] of Survivorship" is recognized in Indiana as creating a joint tenancy. As such, the court held that upon Richard's death, his interest devolved to all three remaining tenants. Thus the court reversed the lower court and held Betty, Burdette, and Janice all hold an undivided one-third interest in the Property, instead of Betty holding a one-half interest and Burdette and Janice holding a one-half interest as tenants by the entirety.

The court of appeals next addressed whether the Ramers were entitled to contribution. The court held that as joint tenants, the Ramers are not entitled to equitable adjustment of their equal shares upon partition. The court of appeals affirmed the lower court in this.

Finally, the court of appeals remanded to the trial court the issue of equitable division of the Property. Because the trial court incorrectly determined Betty and the Ramers each having one-half interests, the Property was not equitably divisible. But equitable division might be possible with Betty, Burdette, and Janice all having equal one-third interests. The court of appeals remanded to the trial court to recalculate a division.

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