                                                RENDERED: AUGUST 24, 2017
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                              2016-SC-000092-DG


ANNE M. TALLEY                                                       APPELLANT


                    ON REVIEW FROM COURT OF APPEALS
V.                       CASE NO. 2014-CA-00590
                  FAYETTE CIRCUIT COURT NO. 13-CI-01952


DANIEL J. PAISLEY                                                     APPELLEE



             OPINION OF THE COURT BY JUSTICE VANMETER

                                  AFFIRMING


      A cotenant of real property, including one who holds as a joint tenant

with right of survivorship, is entitled to contribution from other cotenants with

respect to his or her payment of any liens, taxes or other encumbrances on the

property. Following such contribution, any proceeds to the property are shared

by the cotenants in proportion to their respective ownership interest in the

property. The issue we resolve in this case is whether the Court of Appeals

erred in reversing .the Fayette Circuit Court's judgment that Daniel Paisley and

Anne Talley were to share equally in the proceeds of sale of their jointly owned

real property based on their respective ownership percentages and irrespective

of Paisley's discharge of mortgage liens encumbering the property. We hold
that the Court of Appeals did not err and therefore remand this matter to the

trial court for further proceedings. ·

                FACTUAL AND PROCEDURAL BACKGROUND.

      Paisley and Talley never married, but cohabitated for fifteen years. In

2004, they purchased a tract of land on Lakewood Drive in Lexington in order

to build a residence together. At that time, Talley was married to someone else.

Paisley was divorced and owned another residence in his own name. Talley

also owned a residence, which she sold, and used the proceeds from that sale

($120,000) as the down payment for the Lakewood Drive property. The parties

initially placed the Lakewood Drive property in Paisley's name because Talley

was still legally married. Talley and her husband divorced in October 2006.

      Soon after that divorce, the parties placed the Lakewood Drive property

in their joint names with right of survivorship. At that point, according to

Paisley, he had paid $109,942 in construction and loan costs, and Talley had

paid the initial down payment on the property. Also in November 2006, two

mortgages were taken out on the property, one in the amount of $225,000 and

the other $250,000. Talley and Paisley were co-mortgagors and co-makers of

the notes.

      Paisley sold his residence in July 2007, and used $200,000 of the

proceeds to pay down the $250,000 mortgage on the Lakewood residence. In

December 2009, he paid off the balance of that mortgage .. He also paid

$19,119 down on the $225,000 mortgage, and $3,052 to close a construction

loan in November 2006. From 2007 until March 2014, Paisley made all the

                                         2
mortgage payments in full. According to Paisley, he ~ever demanded payment

from Talley because he believed she would have the funds to contribute her

share to the residence after her former husband paid her $350,000 as part of

their divorce settlement.

      Paisley and Talley's relationship eventually ended. Paisley moved out of

the Lakewood residence in January 2013, although he continued to make the

mortgage and insurance payments. He filed a complaint several months later,

pursuant to KRS 389A.030, seeking to sell the residence and divide the equity

in proportion to the parties' contributions, and specifying that Talley should be

solely responsible for the expenses associated with the house while she resided

there alone.

      The house eventually sold for $715,000. The net equity in the residence

was $477,397: Paisley proposed that these proceeds be divided based on the

parties' proportionate contribution and to reflect the fact that he had

contributed more to the residence. By his calculation, Talley had contributed

$120,000 and he had contributed $383,921. Therefore, Paisley proposed to

receive $369,500 from the proceeds, and for Talley to receive $106,500.1

      Following a bench trial, the trial court found that the parties did not have

an agreement regarding disposition of the property in the event their

relationship ended, and ordered the equity in the residence to be divided

equally between them. The trial court found the evidence insufficient to rebut


      1The parties' total contribution was $503,921. Of this Paisley contributed
76.2% (383,921/503,921), and Talley contributed 23.8% (120,000/503,921).

                                          3
a presumption of equality and accordingly divided the sale proceeds equally.

The trial court largely based its decision on its finding that the parties never

had an agreement, written or verbal, about division of the Lakewood property if

their relationship ended. The court emphasized that if it had found that such

an agreement existed and considered the contributions of the parties as Paisley

requested, it would be required to consider both parties' contributions relative

to the specific facts of this case. The trial court cited no case law in support of

its terse legal conclusion.

      Paisley appealed to the Court of Appeals, which reversed the trial court's

decision. The Court of Appeals declined to disturb the trial court's firiding that

the parties had no agreement about what would happen to the property if their

relationship ended, since the parties' testimony supported that finding.

However, it held that as a matter of law, Paisley was entitled to be

proportionately reimbursed by Talley for payments he made during their joint

tenancy. As a result, the Court of Appeals remanded the case to the trial court

to determine the amount to which he is entitled. Talley petitioned this Court

for discretionary review, which we granted.

                                    ANALYSIS.

      In an appeal from a bench trial without a jury, the trial court's findings

of fact "shall not be set aside unless clearly erroneous, and due regard shall be

given to the opportunity of the trial judge to judge the credibility of the
                                                                       "'

                                         4
witnesses." CR2 52.01. "If the trial judge's findings of fact in the underlying

action are not clearly erroneous, i.e., are supported by substantial evidence,

then the appellate court's role is confined to determining whether those facts

support the trial judge's legal conclusion." Commonwealth v. Deloney, 20

S.W.3d 471, 473 - 74 (Ky. 2000). However, while deferential to the lower

court's factual findings, appellate review of legal determinations and

conclusions from a bench trial is de novo. Sawyer v. Beller, 384 S.W.3d 107,

110 (Ky. 2012).

      Property held jointly with right of-survivorship "is an estate held by two

or more people who (in the case where the estate is held by only two) are not

husband and wife. Each is jointly entitled to the enjoyment of the estate so

long as all live; however, the interest of a joint tenant, at his or her death,

passes to the survivor." Sanderson v. Saxon, 834 S.W.2d 676, 678 (Ky. 1992)

(citations omitted). With respect to the sale or division of property held in joint

tenancy, KRS3 389A.030(4) provides that "[i]f a sale of all or any part of the real

estate shall be ordered, the [trial] court shall refer the matter to the master

commissioner or appoint a commissioner to conduct a public sale and convey

the property upon terms of sale and disposition of the net proceeds as may

have been determined by the court."

          Talley argues that property held in joint tenancy is presumed to be held

equally and, therefore, equal division of the sale proceeds is appropriate in this


      2   Kentucky Rules of Civil Procedure.
      3   Kentucky Revised Statutes.

                                               5
instance. She asserts that to hold otherwise would afford those holding

property jointly with the same rights as·those vested in married couples with

respect to considering contribution in the division of proceeds from the sale of

jointly-owned property, thereby destroying the joint tenancy presumption of

equality. Talley further asserts that. even if Paisley could rebut the

presumption of equality by clear and convincing evidence, he waived any right

to contribution or intended his contributions to Talley to be a gift. She

maintains that since 2007, Paisley knew he had invested more than she had in

the residence, but nonetheless agreed to continue to hold the property jointly,

evidenqed by the parties' reaffirmation of their joint tenancy agreement in 2012

when they refinanced their home. Talley argues the Court of Appeals neglected

to consider defenses to contribution such as waiver and gift.

      Under Kentucky law, joint tenants are entitled to proportionate

reimbursement for the payment of liens and other encumbrances on the

property. The general rule is that "one joint tenant is entitled to contribution

from his cotenant for liens and encumbrances paid by him, including

mortgages, taxes, and ground rent." Larmon v. Larmon, 173 Ky. 477, 191 S.W.

110, 113 (1917) (footnotes omitted).

            [O]ne who pays a joint debt is entitled to contribution
            from his co-obligors and ... a tenant who relieves
            common property from a lien is subrogated to the lien
            on his cotenant's share for the excess he has paid over
            his proportionate share. We think this rule applies
            with equal force to a joint tenancy with survivorship ..
            . . as between each other each was liable for one-half
            of the indebtedness, and if either paid the entire lien
            indebtedness, he was entitled to contribution to the
            extent of one-half of the indebtedness as against the
                                         6
             other, and was subrogated to the original lien upon his
             cotenant's interest to that extent as in other cases of
             cotenancy.

Petty v. Petty, 220 Ky. 569, 295 S.W.863, 864 (1927).

      Furthermore, an agreement between the joint tenants for this type of

reimbursement is not required:

                   Equitable contribution between co-owners of
            undivided interests in real estate has often been
            recognized and enforced, even without a contract
            between the parties to that effect. If one such joint
            owner at his own expense discharges· a lien upon the
            joint property, or is compelled, in order fo protect his
            own interest therein, to pay out his own money to
            acquire outstanding titlt; for the common benefit, he
            may enforce contribution in equity from the other joint
            owners in proportion to their interests.

Bishop v. Wolford, 218 Ky. 657,291 S.W. 1049, 1052 (1927) (citations omitted).

      The record reflects that Paisley did not expressly or implicitly waive any

right to contribution, or intend his contributions to be a gift to Talley. While at

no point did the parties agree, expressly or otherwise, as to division of the

proceeds from the sale of the property, this oversight appears due to the fact

that the parties did not anticipate or contemplate the demise of their

relationship or the division of the Lakewood property at all.·

      Contrary to Anne's assertion, our holding in this case does not disrupt

longstanding legal principles with respect to the definition of joint tenancy with

right of survivorship. That definition remains intact. However, with respect to

the division of proceeds from the sale of jointly-held property when the

cotenants have no agreement regarding how sale proceeds would be split, we

hold that, to the extent one tenant contributed more than his or her half to the
                                        7
discharge of encumbrances, liens, taxes, that tenant is entitled to contribution

from the other.

                                     CONCLUSION.

       For the foregoing reasons, we affirm the Court of Appeals and remand

this case to the Fayette Circuit Court. On remand, the trial court is to make a

determination as to that amount which will equalize the respective

contributions of the parties to the property. Once the parties' respective

contributions to the property have been equalized, the balance of the proceeds

from the sale of the property are to be split equally, 50% to each. 4

       All sitting. Minton, C.J.; Cunningham, VanMeter, Venters and Wright,

JJ., concur. Keller, J., dissents by separate opinion in which Hughes, J., joins.

       KELLER, J., DISSENTING: I respectfully dissent because I believe the

:majority has erred in three ways: (1) the majority ignores the trial court's ·

findings of fact; (2) the majority's decision implicitly gives effect to common law

marriage in violation of our case law stating that such marriages are against

public policy; and (3) the trial court, the majority, and Daniel Paisley

improperly analyze this case as either a contract, family law, or partnership

case, when it is plainly and simply a property case. I address each of these in

turn below.


        4 For example, using Paisley's numbers for purpose of illustration, if the trial
court determines that Paisley contributed $263,921 more than Talley ($383,921 -
$120,000 = $263,921), then an out-of-pocket payment from Talley to Paisley of one-
half of this amount, $131,960.50, equalizes the parties' contribution. The net sale
proceeds would then be split equally. Absent an out-of-pocket payment to equalize,
Paisley would be entitled to the first $263,921 from the net sale proceeds, with the
balance then being split equally between the parties.

                                            8
   I.      Factual Findings

        I believe the majority has ignored the trial judge's findings of fact. As

noted in the majority opinion, the trial court's findings o.f fact "shall not be set

aside unless clearly erroneous, and due regard shall be given to the

opportunity of the trial judge to judge the credibility of the witnesses." CR

52.01. Furthermore, "[i]f the trial judge's findings of fact in the underlying

action are not clearly erroneous, i.e., are supported by substantial evidence,

then the appellate court's role is confined to determining whether those facts

support the trial judge's legal conclusion." Commonwealth v. Deloney, 20

S.W.3d 471, 473-74 (Ky. 2000). While appellate review of legal determinations

and conclusions is de nova, Sawyer v. Beller, 384 S.W.3d 107, 110 (Ky. 2012),

the factual determinations should remain undisturbed.

        The trial court made the requisite findings of fact: the parties were in a

relationship and wanted to have a home together; the parties each contributed

differing amounts toward the home, at different times, throughout the

relationship; the parties initially deeded the property in Daniel's name because

Anne's divorce was not yet final; upon Anne's divorce, Daniel transferred the

property into both parties' names joint with right of survivorship; and both

parties testified that they trusted each other and never had any agreement

about what would happen if they separated. Based upon the above findings,

the trial court found that there was no agreement between the parties, written

or oral, relating to the property.

                                          9
          As the Court of Appeals held and the majority stated, the trial court's

 finding-that the couple had no agreement about what would happen to the

 property if their relationship ended-is supported by substantial evidence in

 the form of the parties' own testimony, and, consequently, should not be

 disturbed on appeal. I agree.

          Further, the trial court was presented with evidence showing that Daniel

 and Anne had contributed differing amounts to the property throughout their

 fifteen-year relationship. However; the majority fails to note that Anne offered

 to sell her UPS stock to contribute to the home, but Daniel told her not to do

 that. The majority further fails to recognize that Anne did not accept a salary

 for her work in Daniel's business. As noted above, this Court should not

 decide which facts are credible and I believe the majority has overstepped its

 bounds by doing so. I expound on these facts below.

    II.      Common Law Marriage

          The majority's decision herein implicitly gives effect to common law

 marriage. Daniel and Anne had been in a relationship for fifteen years and

 may have appeared Eke a married couple. However, the parties' quasi-

. marriage is not endorsed by this Commonwealth. It is well settled in Kentucky

 that there must be a marriage in fact, and common-law marriages are not
                                       .'
 recognized as valid. McDaniel v. McDaniel, 280 S.W. 145, 146 (Ky. 1926).

 While Kentucky courts recognize rights and obligations attendant to a legally

 valid civil marriage, they do not extend such marital rights and obligations to a

 non-marital relationship no matter how closely it resembles a marriage.

                                            10
      Our law providing for how the property of a married couple is to be

distributed foIIowing their separation is weII-developed. Had Daniel and Anne

been married, division of property would be governed by KRS 403.190, and the

court would identify marital and non-marital property, with Daniel and Anne

each receiving their non-marital property before dividing the marital property

in an equitable fashion. Because Daniel and Anne were not married, the

provisions of KRS 403 do ncit apply. Yet the majority is so focused on ensuring

Daniel receives a "fair" and "equitable" distribution that they nonetheless apply

the equitable rules inherent in KRS 403. With its opinion, the majority is

reinstituting "by judicial fiat common law marriage which by expressed public

policy is not recognized." Murphy v. Bowen, 756 S.W.2d 149, 150 (Ky. App.·

1988) (citing KRS 402.020(3)).

      The United States Supreme Court has recognized a fundamental right to

marriage. Loving v. Virginia, 87 S.Ct. 1817, 1824 (1967) (citing Skinner v. State

of Oklahoma, 62 S.Ct. 1110, 1113 (1942)) (Marriage is one of the 'basic civil

rights of man,' fundamental to our very existence and survival.) There is a

sanctity in that right and, therefore, it is unsettling that the majority has

implicitly extended the equitable concepts of the Commonwealth's marriage

laws to this case. Individuals are free to marry or cohabitate as they wish, but

when parties choose the latter they cannot come to the courts asking for the

application of the equitable notions of family law to resolve their conflicts. If

the General Assembly wanted to recognize common law marriage, perhaps it

would have done so sometime in the past 200 years. In any event, common

                                        11
law marriage remains unrecognized and it is not up to this Court to de facto

recognize it in this case.

   III.   Improper Analysis

      The trial court, Daniel, and the majority improperly analyze this case as

if it were either a contract, partnership, or a family law case. However, this

matter emanated as a civil action in the Fayette Circuit Court, general civil

division and is a property case.

   A. Contract Case.

      There was no contract between the parties. The only written documents

pertaining to the parties' relationship are the mortgages and the deed. While

the majority would delve into the parties' intent following the deterioration of

the relationship, that analysis is irrelevant to the parties' conduct at the time

they became joint tenants. Absent any documentation or agreement to the

contrary, the deed is paramount; therefore, the trial court acted appropriately

by finding, based on the joint tenancy deed, that each tenant was entitled to

equal proceeds from the sale of the property.

      That is not to say that Daniel and Anne were not free to contract as they

wished. For example, Daniel and Anne could have executed a cohabitation

agreement to govern distribution of their property while unmarried. Had they

chosen to contract, this Court could protect neither Daniel nor Anne from

making a bad bargain. Farmers' Trust Co. of Harrordsburg v. Threlkeld's

Adm'x., 77 S.W.2d 616, 620 (Ky. 1934) (citing 0.H. Irvine v. Old Kentucky



                                        12
Distillery, etc., 271 S.W. 577 (Ky. 1924)). By the same token, this Court should

not protect Daniel from failing to make a bargain at all.

   s; Partnership Case.
      Daniel argued, and both parties briefed the issue, that this case should,

or should not be, decided under partnership law. While the majority opinion

does not specifically address this argument, I feel compelled to do so.· KRS

362.175 defines a partnership as "an association of two (2) or more persons to

carry on as co-owners a business for profit." First, there was no express

partnership agreement between Daniel and Anne nor any evidence of an

implied partnership. Second, KRS 362.180(2) states that "joint tenancy ...

does not of itself establish a partnership ...." "The law of partnerships does

not apply to a living arrangement, although it could apply to a business carried

~n by persons who lived together." L. Graham & J. Keller, 15 Kentu9ky

Practice Series, Domestic Relations Law§ 2:13 (2016) (internal citations

omitted).

      It behooves me to point out that the existence of a partnership must be

established before a court will look at distribution of partnership property.

Because there is no evidence of any kind of partnership between Daniel and

Anne, we cannot analyze division of the proceeds under a partnership theory to

arrive at a more equitable outcome for Daniel.




                                        13
   C. Property Case.

     As set forth above, this case is not a family law, contract, or partnership

case. In fact, this case is simply a property case and should be resolved based

solely on property law. Our jurisprudence has been couched on the

presumption that joint tenancy creates "equal rights" in title among owners.

See Stambaugh v. Stambaugh, 156 S.W.2d 827, 831 (Ky. 1941). As we noted in

Rakhman v. Zusstone, "[I]t has long been the law in Kentucky that '[r]ecord title

or legal title is an indicia sufficient to raise a presumption of true ownership'."

957 S.W.2d 241, 244 (Ky. 1997) (quoting Tharp v. Security Ins. Co. of New

Haven, Ky., 202 S.W.2d 999 (Ky. 1947)). It is undisputed that Daniel and

Anne ultimately took title to the property through a deed identifying the parties

as joint tenants w.ith right of survivorship; thus, there was a presumption that

each tenant owned a yet undivided, but equal, interest in the property. See

City of Louisville v. Colebume, 56 S.W. 681, 682 (Ky. 1900) ("In order to

constitute an estate in joint tenancy, the tenants thereof must have one and

the same interest, arising by the same conveyance, commencing at the same

time, and held by one and the same undivided possession.")

      Although the shares of joint tenants are presumed to be equal, this

presumption is rebuttable. 48A C.J.S. Joint Tenancy§ 28. "Generally, the

mere fact of a greater contribution to the purchase price by one joint tenant

will not overcome the presumption of equality." Id. (internal citations omitted).

"The beneficial interest of a joint tenant who furnishes nothing for the

purchase of the property, likewise, is generally precisely the same as that of his

                                        14
or her co-owner who furnishes all of the consideration for the purchase of the

jointly held property." Id.   (internal citations omitted).

      In interpreting a deed, we look to the intention of the parties, "gathered

from the four corners of the instrument." Smith v. Vest, 265 S.W.3d 246,249

(Ky. App. 2007) (citing Phelps v. Sledd, 479 S.W.2d 894, 896 (Ky. 1972)

(citations omitted)). We will "not substitute what grantor may have intended to

say for what was said" in the deed itself. Id. (citing Phelps, 479 S.W.2d at 896).

We must begin, therefore, with the premise that the joint tenancy deed granted

Daniel and Anne equal ownership in the property.

      The Court of Appeals and the majority cite two cases for the proposition

that one joint tenant who pays a lien or mortgage is entitled to contribution

from the other joint tenant. Petty v. Petty, 295 S.W.863, 864 (Ky. 1927);

Larmon v. Larmon, 191 S.W. 110, 113 (Ky. 1917).        These cases are not

dispositive for Daniel and Anne. Petty involves collection of a loan against a

surviving joint tenant while Lannon dealt with contributions for repairs made

by a life tenant. I cannot agree with the majority that these cases demand

distribution of the proceeds according to Daniel's and Anne's contributions to

the property. "If the parties are actually making unequal contributions to the

property, they may still take a deed as joint tenants, but they must also have a

separate contract that memorializes their agreement to take account of actual

contribution if the relationship dissolves and one party wishes to buy out the

other." L. Graham & J. Keller, 15 Kentucky Practice Series, Domestic Relations

Law§ 2:13 (2016). This applies directly to Daniel and Anne.

                                         15
      As stated above, the trial court found that the parties had no agreement

as to how the property would be divided should their relationship end. The

trial court further found that the parties had contributed unequal amounts

toward the property throughout the fifteen-year relationship. In fact, the

evidence shows that Daniel never asked Anne to contribute any more to the

property than her initial $120,000, and Anne worked for Daniel's business

without a salary for years. These facts were significant to the trial court's

finding that Daniel had not rebutted the presumption of an equal distribution.

I agree with the trial court's decision and it should not be disturbed.

      Had the parties' relationship ended after Anne made her $120,000 down

payment, but prior to the deed being put in both parties' joint names, Anne

would have had no recourse within the above-cited law, no matter how "unfair"

a result it may seem. Anne's counsel concedes this, The same must be said

for Daniel now. To hold otherwise would completely eviscerate the principles of

property law and give an effect to joint tenancy that was never intended.

      For the foregoing reasons, I respectfully dissent.

      Hughes, J., joins.




                                        16
COUNSEL FOR APPELLANT:

Amy Claire Johnson
Anita Mae Britton
Britton Johnson, PLLC


COUNSEL FOR APPELLEE:

Thomas W. Miller
Elizabeth C. Woodford
Anna Leisa Dominick
Miller, Griffin & Marks, P.S.C




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