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Erps v. Meadows

Supreme Court of West Virginia

April 27, 2017

WILLIAM G. ERPS, Defendant Below, Petitioner
v.
LESLIE MEADOWS, Plaintiff Below, Respondent

          Submitted: January 18, 2017

         Appeal from the Circuit Court of Mercer County The Honorable William J. Sadler, Judge Civil Action No. 13-C-442-WS

          Anthony R. Veneri, Esq. Veneri Law Offices Princeton, West Virginia Counsel for the Petitioner.

          William S. Winfrey, II Attorney at Law Princeton, West Virginia Counsel for the Respondent.

         SYLLABUS

         1. "'In reviewing challenges to the findings and conclusions of the circuit court made after a bench trial, a two-pronged deferential standard of review is applied. The final order and the ultimate disposition are reviewed under an abuse of discretion standard, and the circuit court's underlying factual findings are reviewed under a clearly erroneous standard. Questions of law are subject to a de novo review.' Syl. Pt. 1, Public Citizen, Inc. v. First Natl. Bank in Fairmont, 198 W.Va. 329, 480 S.E.2d 538 (1996)." Syllabus Point 1, McConaha v. Rust, 219 W.Va. 112, 632 S.E.2d 52 (2006).

         2. "When the finding of a trial court in a case tried by it in lieu of a jury is against the preponderance of the evidence, is not supported by the evidence, or is plainly wrong, such finding will be reversed and set aside by this Court upon appellate review.' Point 4, Syllabus, Smith v. Godby, 154 W.Va. 190, 174 S.E.2d 165 (1970)." Syllabus Point 5, In re Boso, 160 W.Va. 38, 231 S.E.2d 715 (1977).

          WALKER JUSTICE.

         Petitioner William Erps appeals a December 29, 2015 Amended Judgment Order of the Circuit Court of Mercer County awarding judgment to Respondent Leslie Meadows in the amount of $85, 675 following a bench trial. Below, Meadows claimed that Erps owed her money from several separate real estate projects that she shared with him. Erps alleges on appeal that certain findings of fact made by the circuit court were clearly erroneous based upon the evidence presented at trial, and that the circuit court abused its discretion in awarding judgment against him. Meadows raises cross-assignments of error alleging that the amount of the circuit court's judgment was inadequate based upon the evidence presented. Upon consideration of the parties' briefs and arguments, the submitted record and pertinent authorities, we affirm in part, and reverse in part, the circuit court's order and remand the case with directions as further indicated below.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Meadows filed this case against Erps in November of 2013. Prior to filing, Meadows and Erps had known each other for several years. Erps provided construction services to Meadows and her husband through Erps's company, Improvements Unlimited, LLC. After Meadows' husband passed away in 2006, Erps continued to do construction work for Meadows. Beginning in 2008, Meadows and Erps were involved in four transactions together in the Princeton area that give rise to the present action. For purposes of this appeal, Meadows's claims involve two of those transactions with Erps: (1) claims related to the purchase of, improvements to, and sale of the Sutphin property located on Old Oakvale Road; and (2) claims related to the financing for the Twiford apartments on Lovell Avenue and Guard Drive.[1]

         In her complaint, Meadows alleged that she had to take a loss on the Sutphin property that the parties jointly purchased because "Erps failed to repay her for the financing she provided to him in the amount of $35, 000." She alleged that Erps's actions in acquiring financing from her were willful, deliberate, and fraudulent and that pursuant to a contract to loan Erps money, he owed her repayment. She also alleged that because of his actions, she lost the opportunity to invest her money, incurred the expense of collection, and suffered annoyance, aggravation and inconvenience.

         With respect to the Twiford apartments, Meadows alleged in her complaint that after her husband died in 2006, Erps approached her about providing him financing for the apartments. She alleged that beginning in 2008 and ending in 2009, she provided Erps with $203, 000 for those buildings, but he gave her nothing in the way of a lien or ownership interest in the property. She contended that she paid Erps five separate checks in the amounts of $67, 000, $90, 000, $6, 000, $10, 000, and $30, 000 for financing purposes.[2]

         Following the completion of discovery, the circuit court conducted a bench trial on October 27, 2015. Meadows and Erps were the only witnesses who testified at trial. The circuit court entered an Amended Judgment Order on December 29, 2015.[3] In its order, the circuit court made the following relevant findings of fact and conclusions of law.

         Regarding the Sutphin property, the circuit court found that Erps approached Meadows about jointly buying the house from Mr. Sutphin for investment and resale. Meadows testified that she cashed a certificate of deposit in the amount of $21, 375 in April of 2009, signed a contract to jointly purchase the property from Mr. Sutphin for $50, 000, and gave Erps $25, 000 for one-half of the down payment that same day. Meadows also alleged that she continued to pay for repairs to the house by paying Erps a total of $32, 300, as itemized in Erps's March 15, 2011, statement to her. Pursuant to terms of the sales contract, a deed reflecting the conveyance of the property from Mr. Sutphin to Erps and Meadows for $50, 000 was recorded on April 27, 2010. Erps testified that at the closing he presented a check dated April 21, 2010 in the amount of $25, 000, which he testified came from his company. However, the circuit court found that Erps failed to produce the $25, 000 check at trial, and instead found Meadows's testimony credible that the $25, 000 down payment came from her cashing the $21, 375 certificate of deposit.

         The circuit court further found that on August 10, 2010, a deed was prepared conveying Meadows' undivided interest in the Sutphin property to Erps and his wife for $35, 000. Erps paid Meadows $35, 000 for her interest in the property from the proceeds of a loan he secured from First Community Bank in the amount of $90, 000, using the property as collateral. Erps subsequently entered into a sales contract with Mr. Shorter, agreeing to sell him the property for $90, 000. The circuit court found that Meadows had invested a total of $53, 675 in the Sutphin property ($21, 375 from cashing the certificate of deposit, plus $32, 300 in payment for improvements as evidenced by Erps's March 15, 2011 statement to her), but she only recovered $35, 000. The court concluded that Meadows should have recovered at least the amount of her investment. Accordingly, the court's judgment order awarded Meadows $18, 675 with respect to the Sutphin property.

         In regard to the Twiford apartments, the circuit court found that there was no written contract between the parties whereby Meadows would contribute funds for the apartments and jointly own them with Erps. The court further found that, even if there had been evidence of an oral contract for the joint purchase of the apartments, such a contract would be in violation of the statute of frauds, and therefore, would be unenforceable.

         Contrary to Meadows's allegation that she provided financing to Erps in the form of five checks totaling $203, 000 (in the amounts of $67, 000, $90, 000, $6, 000, $10, 000 and $30, 000), the circuit court found that Meadows only produced two checks at trial that arguably could be attributed to the apartments - one for $67, 000 and one for $90, 000. The court found that the $67, 000 check, which was tendered in July 2009, was attributable to the apartments based on Meadows's testimony and the notation "APT." written on the check's memorandum line. As for the $90, 000 check, which was dated

          June 15, 2009, the court found that the copy of the check that was admitted into evidence had nothing written on it to indicate that it was related to the apartments, but the copy of the same check that was produced to Erps in discovery contained the words, "Apt. property" on the memorandum line. Meadows conceded in her testimony that she wrote the words "Apt. property" on the check after it was tendered to Erps, processed through the bank, and returned to her. Accordingly, the circuit court found that the preponderance of the evidence was that Meadows lent Erps only $67, 000 for his use toward the apartments; thus, she was a lender of $67, 000, at no interest, and not a joint venturer with Erps for the apartments.

         The circuit court granted judgment in favor of Meadows for a total sum of $85, 675 ($18, 675 for the Sutphin property and $67, 000 for the Twiford apartments) with post-judgment interest. The court further granted Meadows pre-judgment interest from the year 2010 through the entry date of the order. Both parties assign error to the circuit court's rulings.

         II. STANDARD OF REVIEW

         Regarding our standard of review following a bench trial, we have held:

"In reviewing challenges to the findings and conclusions of the circuit court made after a bench trial, a two-pronged deferential standard of review is applied. The final order and the ultimate disposition are reviewed under an abuse of discretion standard, and the circuit court's underlying factual findings are reviewed under a clearly erroneous standard. Questions of law are subject to a de novo review." Syl. Pt. 1, Public Citizen, Inc. v. First Natl. Bank in Fairmont, 198 W.Va. 329, 480 S.E.2d 538 (1996).

Syl. Pt. 1, McConaha v. Rust, 219 W.Va. 112, 632 S.E.2d 52 (2006).

         III. DISCUSSION

         A. Sutphin Property

         In his first assignment of error, Erps contends that the circuit court made a clearly erroneous finding of fact that he did not produce a check at trial in the amount of $25, 000, representing his company's payment of the balance owed for the Sutphin property at closing. According to Erps, that check was introduced as evidence as ...


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