Leeks v. Leeks

Citations: 570 A.2d 271; 1989 D.C. App. LEXIS 283; 1989 WL 200148Docket: No. 85-835

Court: District of Columbia Court of Appeals; October 27, 1989; District Of Columbia; State Supreme Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The case involves a dispute over property ownership between Maybell Leeks, the grandmother, and her grandchildren, Lavinia and Dwight Leeks, initially presented to the court in 1974. Recently, the trial court ruled in favor of Lavinia and Dwight, granting them a two-thirds interest in the property, with Maybell retaining one-third. Maybell contends this ruling is erroneous, asserting she holds full fee simple ownership due to a resulting trust established for her late husband, William Leeks, at the time of the property purchase in 1947. Lavinia and Dwight counter that no resulting trust exists and allege it would be void due to their grandfather's illicit acquisition of a Veteran’s Administration loan through their father, James Leeks.

The court rejected the defense of illegality, indicating that the record does not eliminate genuine issues regarding the ownership of the remaining interest. The court reversed the summary judgment concerning Maybell Leeks's appeal. The property purchase involved James Leeks, an honorably discharged World War II veteran, buying the house in his name to access veteran loan benefits, with claims that William Leeks financed the down payment and all mortgage payments, taxes, and maintenance. After both William and James died intestate, Maybell continued managing the property. In a previous case (Leeks I), William argued for a resulting trust against James's widow, which was upheld, affirming a resulting trust in William's favor for one-third of the property. The court noted that the rights of Lavinia and Dwight were not affected by that ruling, as they were not parties in Leeks I.

The court determined that the judgment favoring William Leeks against Joyce Leeks was final, recognizing that upon James Leeks' death, his property title passed to his wife and two adopted children under D.C. law, which entitles the surviving spouse to one-third and the remaining two-thirds to be divided among the children. The court stated that the judgment would not affect the two-thirds interest of Lavinia and Dwight Leeks, asserting that modifying the judgment was appropriate to protect the interests of absent heirs without undermining the finality of William's judgment against Joyce. 

Following the initial ruling (Leeks I), William conveyed the property to himself and Joyce as tenants by the entirety. Upon remand, the trial court added Lavinia and Dwight Leeks to the existing order to bind them to the resulting trust. A second appeal led to a reversal of the trial court's judgment, clarifying that the original judgment only pertained to Joyce's one-third interest. The court emphasized that Lavinia and Dwight have the right to a hearing regarding their property interests, which had not yet been litigated.

In January 1973, Lavinia and Dwight initiated an action against William for a title declaration, to which William counterclaimed in April 1974 for a resulting trust. Lavinia and Dwight's initial summary judgment motion was denied, but their second motion in April 1983 was granted, establishing their two-thirds interest in the property as tenants in common. A subsequent motion for trustees and appraisers was approved, but Maybell Leeks later sought to set aside these orders, leading to a hearing where the judge ultimately granted the summary judgment in favor of Lavinia and Dwight. The written order confirmed Lavinia and Dwight each held an undivided one-third interest, alongside Maybell’s undivided one-third interest. Maybell Leeks is appealing this decision.

The court reviews a grant of summary judgment using the same standard as the trial court, requiring that there be no genuine issue of material fact for the moving party to prevail. Summary judgment is granted cautiously in cases involving motive or intent. The court reverses the decision due to the existence of a material issue regarding property ownership. In a previous case, Leeks I, a resulting trust was determined in favor of William Leeks, but Lavinia and Dwight Leeks were not parties to that action, leaving unresolved issues concerning their inheritance and the potential illegality defense against Maybell Leeks's claims. Maybell Leeks argues for a purchase money resulting trust for William Leeks, based on the principle that a trust arises when one person pays for property transferred to another. A resulting trust can exist for partial interests, and evidence must clearly show the payment was made to establish such trust. The court previously overturned a ruling that denied a resulting trust for an unmarried couple, indicating intent to share ownership. The current case lacks clarity on whether William and James Leeks intended to share ownership, with no new factual developments since Leeks I. Maybell Leeks cites William Leeks's contributions to the property to support her claim for a resulting trust, but such facts have yet to be established regarding Lavinia and Dwight Leeks.

Lavinia and Dwight Leeks argue that James Leeks’ status as the record title holder until his death and his actions to secure a loan suggest a contrary intent regarding ownership. The existence of a resulting trust concerning the two-thirds interest held by Lavinia and Dwight is unresolved and will require judicial determination, either through trial or summary judgment if no material facts are at issue. The argument that any resulting trust in favor of William Leeks is unenforceable due to his illegal use of veteran benefits is rejected. While it is acknowledged that nonveteran use of such benefits is illegal, the court finds that this does not preclude enforcement of the agreement among the parties. Factors favoring enforcement include the completion of the transaction over forty years ago, lack of serious moral wrongdoing by Maybell Leeks, shared moral fault between James and William Leeks, and the potential for unjust enrichment of Lavinia and Dwight if they are granted ownership based on an illegal transaction. Ultimately, Maybell Leeks is confirmed to own a one-third interest in the property, while the ownership of the remaining two-thirds interest remains to be determined. The trial court is instructed to resolve this issue promptly. Additionally, William Leeks’ significant contributions to the property, made independently of James Leeks, are noted. The court did not address Joyce Leeks’ claim regarding the resulting trust's enforceability due to procedural failures, and the denial of a motion to amend the counterclaim is rendered moot by the reversal of the summary judgment. Following William Leeks’ death, Maybell Leeks is recognized as holding a one-third interest in the property.

Lavinia and Dwight Leeks have agreed to allow Maybell Leeks to hold a life estate, provided they maintain a vested remainder in two-thirds of the property to facilitate a compromise. On remand, the possibility of including a constructive trust theory in the pleadings may be explored. An exception exists where the equitable holder of the fee is a spouse or child of the purchaser. Citing Gustin v. Stegall, the court noted that the presumption of a gift from a father to a son was not applicable in the context of William and James Leeks due to their original intent. The intention behind property relationships between parents and children is central, and any relevant actions or facts can be used to support or counter the presumption of a gift. Evidence of conduct before and after the title transfer is admissible to clarify the payor's intent at the deed's execution. The law recognizes a resulting trust based on the parties’ conduct and the transaction's circumstances, with the burden on the payor to disprove the gift presumption. For a partial resulting trust to apply, both parties must contribute to the property purchase. The Leeks argue that James Leeks’ eligibility for a guaranteed loan constituted his investment. A referenced case, Johnson, illustrated a situation where a veteran's parents contributed financially for a home purchase, leading the court to recognize a resulting trust in favor of the mother despite the title being in the veteran's name.